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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

Mapped: The Top Trading Partner of Every U.S. State

At the national level, Canada and China are top U.S. trading partners. While this generally extends to the state level, there are some surprises too.

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The Top Trading Partner of Every U.S. State

The U.S. is highly dependent—perhaps unsurprisingly—on Canada and Mexico for trade. The country’s top trading partner is Mexico, making up 14.8% of total trade.

However, the country’s neighbors to the north and south are not the only trade partners that U.S. states rely heavily upon. This map from HowMuch.net uses flags to show which country each U.S. state is importing the most from. Below, there is an additional graphic showing where each state is exporting the highest amount of goods and services to.

Who are the States Importing From?

The U.S. has a few natural and obvious trading partners, whether due to geographical closeness or strong economic ties.

The obvious candidates for top trading partners have already been mentioned, Canada and Mexico—and these two do show up at the state level as well. For example, Michigan gets 40.9% of its imports from Mexico, and Montana receives a whopping 87% of its imports from Canada.

Some other interesting trade partnerships stand out, like the Carolinas and Germany. Trade ties between Hawaii and Japan also make sense for historic reasons.

StateTop CountryTotal State Import (Millions USD)Share of Total State Imports
Alabama 🇲🇽 Mexico$4,16116.3%
Alaska🇰🇷 South Korea$83635.0%
Arizona🇲🇽 Mexico$8,97835.0%
Arkansas🇨🇳 China$3,16036.6%
California🇨🇳 China$130,29132.9%
Colorado🇨🇦 Canada$2,92824.3%
Connecticut🇨🇦 Canada$4,03122.4%
Delaware🇨🇭 Switzerland$1,92721.1%
District of Columbia🇨🇦 Canada$7413.7%
Florida🇨🇳 China$11,21214.7%
Georgia🇨🇳 China$20,19420.4%
Hawaii🇯🇵 Japan$29115.1%
Idaho🇨🇦 Canada$1,19521.7%
Illinois🇨🇳 China$48,32431.0%
Indiana🇮🇪 Ireland$11,55818.1%
Iowa🇨🇦 Canada$2,38726.6%
Kansas🇨🇳 China$2,06419.7%
Kentucky🇲🇽 Mexico$6,88212.5%
Louisiana🇷🇺 Russia$2,61112.6%
Maine🇨🇦 Canada$3,16766.6%
Maryland🇩🇪 Germany$3,99313.0%
Massachusetts🇨🇦 Canada$7,77922.2%
Michigan🇲🇽 Mexico$47,47340.9%
Minnesota🇨🇳 China$7,57726.9%
Mississippi🇨🇳 China$3,93824.9%
Missouri🇨🇦 Canada$4,50024.0%
Montana🇨🇦 Canada$3,44287.0%
Nebraska🇨🇦 Canada$87623.5%
Nevada🇨🇳 China$4,10831.8%
New Hampshire🇨🇦 Canada$1,39420.1%
New Jersey🇨🇳 China$14,30212.4%
New Mexico🇨🇳 China$1,49332.6%
New York🇨🇭 Switzerland$33,12621.5%
North Carolina🇩🇪 Germany$9,20815.1%
North Dakota🇨🇦 Canada$1,78162.3%
Ohio🇨🇦 Canada$10,62416.2%
Oklahoma🇨🇦 Canada$4,35540.2%
Oregon🇨🇦 Canada$2,95117.0%
Pennsylvania🇨🇳 China$13,47015.9%
Puerto Rico🇮🇪 Ireland$9,06242.7%
Rhode Island🇩🇪 Germany$1,52517.3%
South Carolina🇩🇪 Germany$6,22015.5%
South Dakota🇨🇦 Canada$42833.9%
Tennessee🇨🇳 China$20,30524.3%
Texas🇲🇽 Mexico$88,72635.8%
Utah🇲🇽 Mexico$4,29427.6%
Vermont🇨🇦 Canada$1,67763.5%
Virginia🇨🇳 China$6,56622.7%
Virgin Islands🇵🇹 Portugal$17427.7%
Washington🇨🇦 Canada$12,77226.1%
West Virginia🇨🇦 Canada$1,02535.2%
Wisconsin🇨🇳 China$5,55420.7%
Wyoming🇨🇦 Canada$69563.7%

However, one country in particular stands out on this map—China.

While the USMCA trade agreement has created an easy gateway for necessary goods and services to flow across North America, no country—not even the U.S.—can escape the need for mass imports from the world’s top exporter.

China and the U.S. have an imbalanced trade relationship, with China buying much fewer goods from the U.S. than the U.S. buys from them. In fact, China’s monthly trade surplus with the country sat at $31.8 billion as of May 2021.

Who are the States Exporting to?

After looking at the top import partners by state, let’s dive in to where the U.S. states are exporting the most.

Trading Partner of Every U.S. State

One thing that is noticeable is that China shows up much less on this map, further exemplifying the trade imbalance. In other words, while many states’ top import partner is China, they are not reciprocating as the country’s top export partner.

The only states that export their largest shares to China are:

  • Oregon – 38.1%
  • Alaska – 25.5%
  • Washington – 22.1%
  • Alabama – 18.1%
  • Louisiana – 18.1%

The majority are exporting to their North American neighbors. For example, North Dakota sends 84.6% of its exports just across the northern border.

StateTop CountryTotal State Export (Millions USD)Share of total State Exports
Alabama 🇨🇳 China$3,10218.1%
Alaska🇨🇳 China$1,17625.5%
Arizona🇲🇽 Mexico$3635.5%
Arkansas🇨🇦 Canada$1,14822.1%
California🇲🇽 Mexico$24,07815.4%
Colorado🇨🇦 Canada$1,27815.4%
Connecticut🇩🇪 Germany$2,18915.9%
Delaware🇨🇦 Canada$61915.8%
D.C.🇶🇦 Qatar$89932.4%
Florida🇧🇷 Brazil$3,5387.7%
Georgia🇨🇦 Canada$5,14613.3%
Hawaii🇦🇺 Australia$5115.8%
Idaho🇨🇦 Canada$1,18434.8%
Illinois🇨🇦 Canada$13,26124.8%
Indiana🇨🇦 Canada$11,08031.4%
Iowa🇨🇦 Canada$3,46027.4%
Kansas🇲🇽 Mexico$2,07820.0%
Kentucky🇨🇦 Canada$6,55026.5%
Louisiana🇨🇳 China$10,77918.1%
Maine🇨🇦 Canada$1,22952.8%
Maryland🇨🇦 Canada$1,58112.5%
Massachusetts🇨🇦 Canada$2,74611.0%
Michigan🇨🇦 Canada$17,34139.4%
Minnesota🇨🇦 Canada$4,82824.0%
Mississippi🇨🇦 Canada$2,08220.3%
Missouri🇨🇦 Canada$4,45334.9%
Montana🇨🇦 Canada$54437.9%
Nebraska🇲🇽 Mexico$1,63923.5%
Nevada🇨🇭 Switzerland$2,25621.8%
New Hampshire🇩🇪 Germany$75113.8%
New Jersey🇨🇦 Canada$7,22919.0%
New Mexico🇲🇽 Mexico$2,19759.5%
New York🇨🇦 Canada$13,77322.3%
North Carolina🇨🇦 Canada$5,88120.7%
North Dakota🇨🇦 Canada$4,38884.6%
Ohio🇨🇦 Canada$17,27338.4%
Oklahoma🇨🇦 Canada$1,45227.0%
Oregon🇨🇳 China$9,52238.1%
Pennsylvania🇨🇦 Canada$9,69925.9%
Puerto Rico🇳🇱 Netherlands$2,88917.2%
Rhode Island🇨🇦 Canada$41017.1%
South Carolina🇩🇪 Germany$4,08213.5%
South Dakota🇨🇦 Canada$52438.0%
Tennessee🇨🇦 Canada$5,81820.7%
Texas🇲🇽 Mexico$89,04631.9%
Utah🇬🇧 United Kingdom$8,90650.3%
Vermont🇨🇦 Canada$91838.3%
Virginia🇨🇦 Canada$2,71716.5%
Virgin Islands🇳🇱 Netherlands$9015.2%
Washington🇨🇳 China$9,12622.1%
West Virginia🇨🇦 Canada$1,28328.1%
Wisconsin🇨🇦 Canada$6,22630.4%
Wyoming🇨🇦 Canada$22519.3%

Trade Going Forward

The trade war that started during the tenure of former U.S. president Donald Trump is still ongoing and tariffs set by the U.S. are not expected to be lifted by president Joe Biden, as tensions have expanded beyond just trade issues.

These tariffs, however, have not helped to rectify the significant trade imbalance between the two countries. The states are still extremely reliant on imports from China, and it is not a reciprocal relationship.

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Money

Ranked: The Richest Veterans in America

There are over 18 million living veterans in the U.S., but how many are ultra wealthy? This visual ranks the richest veterans in America.

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Ranked: The Richest Veterans in America

The U.S is home to 724 billionaires, many of whom have taken on immense risks in the financial world. 16 of these wealthy individuals have also taken on the risks that come with serving in the U.S. military.

These veteran billionaires are worth a collective $81.4 billion and have served in posts ranging from Reserve Officers’ Training Corps (ROTC) to infantrymen in the Second World War. This visual, using data from Forbes, ranks the richest living American veterans.

This visual categorizes the individuals by either the military branch or war served in depending on what was applicable or determinable.

I Want You for the U.S. Army

According to the Department of Veteran’s Affairs, there are around 18 million veterans in the U.S. Of these 18 million, less than 0.01% can claim the title of billionaire.

NameNet Worth (Billions, USD)Industry War / Unit Served
Donald Bren$15.3Real Estate Marine Corps
Edward Johnson III$10.3Finance & InvestmentsArmy
Ralph Lauren$7.1Fashion & RetailArmy
Richard Kinder$7.0EnergyVietnam War
Charles Dolan & family$6.1Media & EntertainmentWWII, Airforce 
Fred Smith$5.7Logistics Vietnam War, Marine Corps
Charles B. Johnson$4.9Finance & Investments Army
Ted Lerner & family$4.8Real Estate WWII
Julian Robertson Jr.$4.5Finance & Investments Navy
John Paul DeJoria$2.7Fashion & Retail Navy
H. Ross Perot Jr.$2.7Real Estate Airforce
Bob Parsons$2.2Technology Vietnam War, Marine Corps
David H. Murdock$2.1Food & BeverageWWII
S. Daniel Abraham$2.0Food & BeverageWWII, Army
Charlie Munger$2.0Finance & InvestmentsWWII, Army Air Corps
George Joseph$2.0Finance & InvestmentsWWII

Six of the above veteran billionaires served in WWII. They are some of the last surviving veterans of the historic war which was fought by 16 million Americans—today, only around 325,000 WWII veterans are still alive.

George Joseph, of Mercury Insurance Group, piloted a B17 Bomber plane in WWII, and completed around 50 missions. Warren Buffett’s business partner at Berkshire Hathaway, Charlie Munger, served in the Army Air Corps in the early 1940s.

Richard Kinder (Kinder Morgan Inc.), Fred Smith (FedEx), and H. Ross Perot Jr. (Hillwood Investment Properties) each served in the Vietnam war.

One notable figure, Ralph Lauren, whose name is synonymous with his clothing products, served in the Army branch for two years in the early 1960s.

Taking on Financial Risk

Billionaire wealth continues to grow in America. Most of these veteran billionaires saw their net worths increase from 2020 to 2021, as, typically, wealth begets wealth. Here’s a look at the changes in net worth of the top five richest veterans who experienced increases:

  • Edward Johnson III: +$4.9 Billion
  • Ralph Lauren: +$1.4 Billion
  • Richard Kinder: +$1.8 Billion
  • Charles Dolan & Family: +$1.5 Billion
  • Fred Smith: +$3.0 Billion

The majority of these veteran billionaires are in the finance industry and some are tied to well-known companies, but they didn’t always have billions on hand to help them exponentially grow their fortunes.

David Murdock was a high school dropout, and after serving in WWII, had no money to his name. He took over a failing company called Dole, and eventually gained the moniker of ‘pineapple king’ after reviving the business.

S. Daniel Abraham, who was an infantryman in WWII, went on to found Thompson Medical. Their main product was Slimfast, which he later sold to Unilever for $2.3 billion in cash in the early 2000s.

Bob Parsons, who received a Purple Heart for his service in Vietnam, started out his professional career as a CPA. He later founded the enormous domain giant, Go Daddy. He has claimed that his time in the military helped him succeed in business.

Peace and Prosperity

We currently live in one of the most peaceful and prosperous times in history, with wars like WWII feeling to many like a story from the past — but for others these conflicts were defining moments for their generation.

While many veterans struggle to readjust to civilian life, on average pre-9/11 veterans have reported fewer difficulties compared to post-9/11 veterans, and some have even managed to reach the highest levels of financial success.

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