Aging population does not have to be a negative for the economy, says Citigroup

Aging population does not have to be a negative for the economy, says Citigroup
Report cites financial resilience among key elements of strong 65+ population .
JUL 19, 2024

We know that the US population is aging and the same is true globally, but this is often put in context of a huge negative for the economy. But does that have to be the case?

A new report from Citigroup says that there are ways to maximize the aging population through financial resilience and encouraging longer participation in the workforce, boosting the economic participation of those who would historically be retired.

“Demographics are not necessarily destiny. While aging will no doubt influence outcomes for the economy and markets, there are ample mechanisms for the economy to adjust—or technology to innovate—in response to the challenges posed by demographics. For example, encouraging older workers to remain in the workforce for longer by providing more flexible employment contracts,” said Nathan Sheets, chief economist of Citi Global.

Citi Global Perspectives and Solutions compiled the report and challenge the narrative that the aging population will be dependent on a smaller working-age population that will not be sufficient to support the needs of older generations.

“One of the challenges of the combination of increasing life expectancy and declining fertility is the risk of many more elderly people becoming dependent on a declining workforce,” said Professor Ian Goldin, Oxford University Professor of Globalization and Development and director of several research programmes at the Oxford Martin School. “Governments and firms need to explore how to allow people to work in different ways and to develop much more flexible retirement and seniority structures to ensure demographic change is embraced as an opportunity rather than crippling families and economies.”

While the impact of aging cannot be ignored – the report notes the importance of supporting healthy aging and shifting to a more preventive healthcare system in maximizing the growing cohort of over 65s – financial planning and financial inclusion are also vital to ensuring that older people are not reliant on state benefits.

“The over 65 population has grown rapidly over the past decade in the U.S. alone, resulting in an ever-increasing need for financial planning to ensure we can build ourselves sustainable financial futures over decades,” said Gonzalo Luchetti, Citi Head of US Personal Banking.

Latest News

RIA moves: The Mather Group, Brand Asset Management announce deals
RIA moves: The Mather Group, Brand Asset Management announce deals

Consolidation continues in US wealth management industry.

US broker-dealer fintech aims for global footprint as it acquires international firm
US broker-dealer fintech aims for global footprint as it acquires international firm

Tech company democratizes access to US trading infrastructure.

Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel
Advisor moves: RBC swipes $1.7B UBS team, Baird duo departs for LPL's Linsco channel

RBC Wealth Management's latest move in New York adds an elite eight-member team to its recently opened Westchester office.

Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints
Stifel star broker, Chuck Roberts, leaves firm under cloud of investor complaints

Stifel – so far - is on the hook for more than $166 million in damages, legal fees and settlements in investor complaints involving Roberts, a 35-year industry veteran.

iCapital secures $820M in latest funding, hits $7.5B
iCapital secures $820M in latest funding, hits $7.5B

The giant alt investments platform's latest financing led by T. Rowe Price and SurgoCap Partners, along with State Street, UBS, and BNY, will fuel additional growth on multiple fronts.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.