In 2001, together with Russia, India and China, Brazil was famously identified by the acronym BRIC, as one of the top emerging markets for investors to watch. Since then, times have changed.
Brazil has suffered from the deepest recession in its history and continues to experience ongoing political turmoil. And, underneath the surface, Brazil is facing an even greater challenge: demographic shift. Established in 2016, the Instituto de Longevidade Mongeral Aegon is looking to highlight and help resolve the social and economic issues caused by the ongoing demographic shift.
Recognizing demographic shift
Demographic shift doesn't sound like something to get very excited about, which is one of the reasons it doesn't receive the attention it deserves. Put simply, in common with most countries around the world, Brazil is experiencing a fundamental and rapid shift in the constitution of its population.
According to the World Bank, in 1970, about 43 percent of Brazil's population was under the age of 14, and life expectancy at birth was 59. Today, about 23 percent of its population is aged less than 14, and life expectancy at birth is 75. Fertility rates have fallen from 5 children per woman in 1970 to 1.8 children per woman in 2015 (below the 2.1 rate required for a stable population size). As a consequence of these radical changes, the elderly population is the most rapidly growing segment of Brazil's population.
According to the OECD, the population aged over 65 years in Brazil will grow five-fold over the coming decades, increasing from 7.6 percent today to 38 percent in 2050. This is an enormous challenge, and requires understanding, attention and action from government, companies and individuals.
A new approach to retirement
Brazil today is a country of about 209 million people. Over the past decade, Brazil has succeeded in lifting tens of millions of its citizens from poverty. However, in the face of demographic shift, it is important to realize that what has worked in the past, probably will not work in the future.
According to Aegon's latest Retirement Readiness Survey, in Brazil, the average age of retirement is presently 54 years (for comparison, it's presently 65 in the US, 69 in Chile, and 72 in Mexico) – and there is no minimum age for retirement, although the National Congress is debating a reform that could set a minimum retirement age of 65. As a consequence of its early retirement age, Brazil is presently struggling to meet its increasingly unsustainable social security obligations, paying approximately 12 percent of its GDP to pensioners.
In common with countries around the world, it is inevitable that a retirement system designed for a previous age will have to be adapted in order to continue to meet the needs of an older, longer-living population.
Life is the most precious of gifts, and the ongoing increase in life expectancy is perhaps one of the least appreciated wonders of the past century. Yet this lack of understanding and appreciation too often means that we are slow to recognize the need to change.
The Instituto de Longevidade Mongeral Aegon is trying to change this. Focusing on the group of Brazilians aged over 50 (46 million today, more than 95 million by 2050), the Institute is focused on providing research on longevity, as well as proposing solutions to social and economic challenges.
The Institute is presently driving two initiatives, one focused on introducing a new law to allow more flexible labor relations and incentives to hire workers who are older than 60. The second – the launch of the Urban Development Longevity Index (IDL) together with the Getulio Vargas Foundation – is intended to look at how 498 Brazilian cities are preparing to meet the needs of the growing population of older people.
"The IDL presents, in a very objective way, the main points we need to address in order to improve people's quality of life," says Henrique Noya, Executive Director of the Instituto de Longevidade Mongeral Aegon. "When we promote quality of life for a given group, everyone benefits."
Fit for the future?
Brazil is not alone in the challenges it faces from rising longevity and demographic shift. The Instituto de Longevidade Mongeral Aegon demonstrates one way we can help tackle the challenge – by working together to understand and address the issues, to help adapt our expectations, behaviors and institutions in order to allow everyone the possibility of enjoying financial security throughout their lives.