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Ageing population renders traditional investment ineffective
T. Rowe Price Group VP said investment strategies must adapt to an ageing population, as Australians outlive their retirement savings.
Australians have an estimated 9.7 years of savings beyond retirement; however, the population is expected to outlive these savings by 9.9 years for men and 12.6 years for women, according to the World Economic Forum.
As more Australians move towards retirement and life expectancy increases, traditional retirement investment may not suffice for the economic complexity of an ageing population.
Ahead of her keynote address at the Australian Wealth Management Summit 2025, Cassandra Crowe, CFA, vice-president, T. Rowe Price Group Inc, said the world’s ageing population has forced investors to pivot retirement and investment strategies to meet the future demographic.
The number of people aged 65 or older is projected to reach 994 million by 2030 and 1.6 billion by 2050, according to the United Nations. In fact, the World Health Organisation reports that people aged 60 years and older already outnumber children aged five years or younger.
“With more of the population ageing, we are shifting to a new chapter in global demographics,” Crowe said.
The decline in the working-age population leaves nations with larger older populations now reliant on a relatively smaller group to pay for publicly funded programs, such as pension benefits.
This shift in demographics alters demand drivers within the economy and places strain on the system.
“As wealth transitions from savings to pension phase, retirement savings have not kept pace and without action, this shortfall is anticipated to grow,” she said.
“We are facing big questions, but these demographic shifts will present opportunities to invest, as well as make a positive impact across society through improved retirement outcomes.”
The demand for innovative solutions to improve retirement outcomes is projected to intensify as retiree populations grow, the T. Rowe Price Group VP said.
“While challenging, as we shift to a new frontier, human progress is clear. Longer lives reflect advances in healthcare, education and economic development,” Crowe said.
“We’re entering an era where wisdom, experience and longevity become powerful assets for society.”
To hear Crowe speak further on the core questions and mega themes transforming the investment landscape, come along to the Australian Wealth Management Summit 2025.
Run in partnership with principal partner Metrics, the summit will be held on Friday, 22 August 2025, at the Sofitel Sydney Wentworth. Click here to buy tickets.
To learn more about the summit, including the agenda and speakers, click here.
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