In Asia, workers are facing a different retirement worry, a byproduct of their astonishing economic growth.
Traditionally, Chinese and Koreans could expect their grown children to care for them as they aged. But newly prosperous young people increasingly want to live on their own. They also are more likely to move to distant cities to take jobs, leaving parents behind. Countries like China and South Korea are at an "awkward" stage, says Jackson at the Center for Strategic and International Studies: The old ways are vanishing, but new systems of caring for the aged aren't yet in place.
Yoo Tae-we, 47, a South Korean manager at a trading company that imports semiconductor components, doesn't expect his son to support him as he and his siblings did their parents. "We have to prepare for our own futures rather than depending on our children," he says.
South Korean public pensions pay an average of just $744 a month. South Korea has the rich world's highest poverty rate for the elderly. It has one of the world's highest suicide rates for the aged, too.
China, too, will struggle to finance retirement. China pays generous pensions to civil servants and to urban workers who toiled in inefficient state-owned factories. These workers can retire early with full benefits - at 60 for men and 50 or 55 for women, depending on their job. Their pensions will prove to be a burden as China ages and each retiree is supported by contributions from fewer workers. The elderly are rapidly becoming a bigger share of China's population because of a policy begun in 1979 and only recently relaxed that limited couples to one child.
The World Bank says the cost of those pensions could eventually reach twice the size of China's annual gross domestic product. That would put the bill at more than $16 trillion.
China is considering raising its retirement ages. But the government would likely meet resistance. "I heard that the authorities might postpone the age of the retirement, but I sure hope not, since I've already worked for almost 42 years," says Dong Linhua, 59, a former Shanghai factory worker and now a real estate investor, who owns three apartments and two small shop spaces.
China also tightly regulates investing, limiting access to assets that are more likely to generate the returns workers need to build a healthy retirement account.
"Things that you and I take for granted, like being able to invest in mutual funds or being able to buy stocks and bonds, are in their infancy in China," says Josef Pilger, leader of Ernst & Young's Asia-Pacific pension practice in Sydney, Australia. "The biggest fear the Chinese regulators have is: What if we relax investment restrictions and we have a financial crisis? People will be on the street, saying: 'You let me play with fire, and I burned my fingers.' "
THE END OF TRADITIONAL PENSIONS
Governments aren't alone in cutting pensions. Corporations are, too. The traditional defined-benefit pensions they long had provided are vanishing. Companies don't want to bear the risks and costs of guaranteeing employees' pensions. They've moved instead to so-called defined-contribution plans, such as 401(k)s in the U.S., which shift responsibility for retirement savings to employees.
The problem with these plans is that people have proved terrible at taking advantage of and managing them. They don't always enroll. They don't contribute enough. They dip into the accounts when they need money.
They also make bad investment choices; often buying stocks when times are good and share prices are high and bailing when prices are low. Investment returns from defined-contribution plans are typically 0.76 percentage points lower than returns on defined-benefit plans, according to the consulting firm Towers Watson. That difference adds up: At a 5 percent annual return, $100,000 becomes $432,000 after 30 years. At 5.76 percent, it's 24 percent higher — $537,000.