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The Pension Time Bomb: $400 Trillion by 2050

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The Pension Time Bomb: $400 Trillion by 2050

The Pension Time Bomb: $400 Trillion by 2050

View the high resolution version of today’s graphic by clicking here.

Are governments making promises about pensions that they might not be able to keep?

According to an analysis by the World Economic Forum (WEF), there was a combined retirement savings gap in excess of $70 trillion in 2015, spread between eight major economies..

The WEF says the deficit is growing by $28 billion every 24 hours – and if nothing is done to slow the growth rate, the deficit will reach $400 trillion by 2050, or about five times the size of the global economy today.

The group of economies studied: Canada, Australia, Netherlands, Japan, India, China, the United Kingdom, and the United States.

Mind the Gap

Today’s infographic comes to us from Raconteur, and it illuminates a growing problem attached to an aging population (and those that will be supporting it).

Since social security programs were initially developed, the circumstances around work and retirement have shifted considerably. Life expectancy has risen by three years per decade since the 1940s, and older people are having increasingly long life spans. With the retirement age hardly changing in most economies, this longevity means that people are spending longer not working without the savings to justify it.

This problem is amplified by the size of generations and fertility rates. The population of retirees globally is expected to grow from 1.5 billion to 2.1 billion between 2017-2050, while the number of workers for each retiree is expected to halve from eight to four over the same timeframe.

The WEF has made clear that the situation is not trivial, likening the scenario to “financial climate change”:

The anticipated increase in longevity and resulting ageing populations is the financial equivalent of climate change

Michael Drexler, Head of Financial and Infrastructure Systems, WEF

Like climate change, some of the early signs of this retirement savings gap can be “sandbagged” for the time being – but if not handled properly in the medium and long term, the adverse effects could be overwhelming.

Future Proofing

While implementing various system reforms like raising the retirement age will help, ultimately the money in the system has to come from somewhere. Social security programs will need to cut benefits, increase taxes, or borrow from somewhere else in the government’s budget to make up for the coming shortfalls.

In the United States specifically, it is expected that the Social Security trust fund will run out by 2034. At that point, there will only be enough revenue coming in to pay out approximately 77% of benefits.

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Politics

Ranked: Countries with the Most Embassies Around the World

The Global Diplomacy Index attempts to quantify and compare diplomatic networks by ranking countries with the most embassies worldwide.

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A map of the countries with the most embassies worldwide.

Mapped: Countries with the Most Embassies Around the World

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

It’s easy to contextualize a country’s economic might (GDP) or military prowess (military budgets), but what about diplomatic influence?

The Global Diplomacy Index by the Lowy Institute is an attempt to measure and compare diplomatic networks worldwide to understand the foreign ties that influence geopolitics.

From their 2024 update, we visualize the top 25 countries with the most embassies worldwide. Data for this graphic is current up to November 2023, and does not reflect diplomatic consequences from the Israel-Hamas war.

Ranked: Countries by Worldwide Embassy Count

China leads with 173 embassies around the world, eclipsing the U.S. (168) by just five more foreign posts.

Former colonial powers, France (158) and the UK (156) rank third and fourth respectively. Japan (152) rounds out the top five.

RankCountryEmbassies Overseas
1🇨🇳 China173
2🇺🇸 U.S.168
3🇫🇷 France158
4🇬🇧 UK156
5🇯🇵 Japan152
6🇩🇪 Germany148
7🇹🇷 Türkiye145
8🇷🇺 Russia143
9🇧🇷 Brazil135
10🇮🇳 India135
11🇮🇹 Italy124
12🇪🇸 Spain114
13🇰🇷 South Korea114
14🇳🇱 Netherlands106
15🇸🇦 Saudi Arabia104
16🇨🇭 Switzerland102
17🇨🇦 Canada98
18🇿🇦 South Africa98
19🇮🇩 Indonesia92
20🇵🇱 Poland91
21🇨🇿 Czech Republic91
22🇵🇰 Pakistan89
23🇦🇷 Argentina87
24🇭🇺 Hungary87
25🇸🇪 Sweden87

Note: As of November, 2023.

The index notes some key findings in the regional footprint of all these foreign posts as well.

For example, China has a larger diplomatic presence in Africa, East Asia, and the Pacific, while the U.S. leads in the Americas, Europe, and South Asia. This reflects the two superpowers’ trade and economic ties as well.

Meanwhile, Türkiye and India have grown their diplomatic networks the most in recent years. Interestingly, both countries prioritized Africa in their new outreach. In fact, India is a key export destination for many African countries.

Russia meanwhile had to close 14 foreign missions since it invaded Ukraine in 2022, slipping two ranking spots between 2017 and 2022.

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