Who will pay for a 100 million boomer pensions?

TL;DR

No generation can painlessly fund boomer retirement — every pension model faces the same demographic math of fewer workers supporting more retirees.

Key Points

• 1.The worker-to-pensioner ratio is collapsing. In rich countries it has fallen from ~5 workers per pensioner when boomers started working to ~3 today, and OECD projections show it will drop below 2 within 30 years.
• 2.Pay-as-you-go systems face three painful and politically toxic fixes. Governments must choose between raising the retirement age (Germany, Netherlands heading to 67; Italy toward 70), cutting pension benefits (Germany tried reducing payouts from 48% to 45% of average wage), or hiking worker contributions (Canada raised rates from 5% to 6% between 2018–2023).
• 3.Fully funded systems like Denmark and the Netherlands appear more sustainable but may be built on a financial illusion. These countries invest worker savings in stock and bond markets, but the 'asset meltdown hypothesis' — first raised by Sheber and Schovin in 1994 — warns that mass boomer retirement will force pension funds to sell assets faster than smaller younger generations can buy them, crashing prices.
• 4.Chile's pandemic pension withdrawals accidentally tested the asset meltdown hypothesis and confirmed it. When Chile allowed early pension access during COVID-19, the local stock market crashed, inflation spiked, and the government was forced to nationalize the pension system — turning it from funded to pay-as-you-go.
• 5.LSE economist Charles Goodhart predicts aging will cause lower asset prices, higher inflation, higher taxes, and — the only upside — lower inequality. Fewer workers, especially in low-paid care sectors, gives them wage bargaining power, though rising inflation will erode those gains.
• 6.Small funded-system countries like Denmark and the Netherlands may have one genuine escape route. By investing the majority of their pension savings abroad — especially in the demographically younger US — they may delay the domestic asset meltdown that pure pay-as-you-go nations cannot avoid.