Space Sustainability: Preserving the Usability of Outer Space
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Space Sustainability: Preserving the Usability of Outer Space

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The following content is sponsored by Secure World Foundation.

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Space Sustainability: Preserving the Usability of Outer Space

Humanity is yet to explore the limits of our universe, but outer space is already becoming an increasingly important resource for the Earth.

The Earth’s orbits support various satellite applications that enable the technologies we use on a daily basis. While space might seem infinite, the orbits in which satellites travel constitute a limited natural resource with a finite amount of physical space. These orbits are becoming more and more crowded with satellites and space junk—and managing this resource sustainably is critical to the future of activities in space.

The above infographic from our sponsor Secure World Foundation highlights the challenges facing space sustainability and the potential solutions that can help manage this resource for the future.

The Need to Preserve Outer Space

Thousands of satellites orbit the Earth at different altitudes, providing social, scientific, and economic benefits to people across the globe. While some satellites are helping advance science and exploration in space, others are monitoring the Earth’s environment and aiding disaster management on the ground.

However, space is a global resource, where the presence and actions of one actor can affect all the others in orbit. In 1990, there were less than 500 active satellites orbiting the Earth. Today, there are more than 4,000 active satellites in space. Furthermore, with companies like SpaceX launching expansive satellite networks, the majority of active satellites today are for commercial purposes, with a smaller portion serving government, military, civil, and academic needs.

The rapid increase in the number of satellites, driven by the commercial sector, poses challenges to the future of space activity and sustainability.

Three Challenges to Space Sustainability

Space sustainability is ensuring that all humanity can continue to use outer space for peaceful purposes and socioeconomic benefits now and in the long term. This will require international cooperation, discussion, and agreements designed to ensure that outer space is safe, secure, and peaceful.

There are several challenges facing space sustainability, but three important issues stand out.

Challenge #1:
Space Junk

As the term suggests, space junk or orbital debris refers to defunct satellites, old rocket bodies, and fragmented objects in space that no longer serve a useful purpose.

According to the European Space Agency (ESA), the mass of all debris objects in space summed up to 8,800 tonnes as of December 2020. This includes:

  • 34,000 objects greater than 10cm in size
  • 900,000 objects between 1cm and 10cm
  • 128 million objects between 1mm and 1cm

Although these objects seem small in size, they can travel at speeds up to 29,000 km/h or roughly 8 km/s. As a result, even collisions with small pieces of debris can have dangerous consequences for those in space.

The increasing amount of space junk brings up another issue—the physical congestion in Earth’s orbits.

Challenge #2:
Orbital Crowding

The Earth’s orbits have a limited amount of physical space. Today, these orbits host thousands of satellites of different sizes, in addition to the debris and objects that are floating around.

Physical crowding of orbits with satellites and debris can lead to a chain reaction known as the Kessler syndrome. This refers to a scenario where the density of objects in the Low Earth Orbit (LEO) is high enough that collisions between objects can create a cascading effect where each collision generates debris that increases the probability of further collisions.

Moreover, satellite constellations—large networks of satellites—are becoming more common. Here are some examples of planned satellite constellations as of August 10, 2021:

CompanyConstellation NameNumber of Satellites
SpaceXStarlink41,493
China SatNetGuo Wang12,992
OneWebN/A6,372
Lynk GlobalN/A5,000
AmazonKuiper3,326
Hanwha SystemsN/A2,000
SatRevolutionREC1,024

Orbital crowding with satellites and space junk can cause both physical congestion and electromagnetic interference, hindering communication and security in space.

Challenge #3:
Space Security

Militaries use space to support operations with communications, intelligence, navigation, and surveillance satellites, which play an important role in both national and international security.

However, with more nations integrating space into their security measures, there is an increased risk of conflict in case of any satellite interference. As a result, militaries are developing capabilities to disrupt, degrade, or destroy satellites for national security reasons.

Since 1959, China, India, Russia, and the U.S. have carried out more than 70 anti-satellite (ASAT) tests collectively. These tests generated over 5,000 pieces of debris that are currently being tracked, in addition to the thousands of smaller objects that are too small to track.

Managing Space: A Resource for the Future

Space junk, orbital crowding, and space security are challenges that call for policies, practices, and technologies to use space sustainably.

Potential solutions to these issues range from technical measures like removing space debris, managing orbital traffic, and improving situational awareness, to policy measures like space governance, data-sharing, and implementing effective regulations.

While some of these initiatives are already underway, such as the world’s first debris removal mission launching in 2025, ensuring space sustainability on a global level will require policy and technical measures on a global scale.

Secure World Foundation promotes cooperative solutions for space sustainability and the peaceful uses of outer space.

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Retirement Spending: How Much Do Americans Plan to Spend Annually?

Retirement expenses can vary significantly from person to person. In this graphic, we show the range of expected retirement spending.

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Retirement Spending

Americans’ Expected Annual Retirement Spending

Planning for retirement can be a daunting task. How much money will you need? What will your retirement spending look like?

It varies from person to person, based on factors like your health, outstanding expenses, and desired lifestyle. One helpful trick is to break it down into how much you estimate you’ll spend each year.

In this graphic from Personal Capital, we show the expected annual retirement spending of Americans. It’s the last in a three-part series that explores Americans’ spending and savings.

The Range of Retirement Spending

To determine how much people expect to spend, we used anonymized data from users of Personal Capital’s retirement planning tool. It’s worth noting that these users are proactive regarding financial planning. They also have a median net worth of $829,000 compared to the $122,000 median net worth of the U.S. population overall.

Here is the range of expected annual retirement spending.

Expected Annual Retirement SpendingPercent of People
$10K1.3%
$20K3.3%
$30K7.5%
$40K9.8%
$50K5.2%
$60K12.7%
$70K10.2%
$80K6.4%
$90K9.1%
$100K5.4%
$110K1.5%
$120K9.7%
$130K1.5%
$140K2.8%
$150K2.2%
$160K0.9%
$170K0.4%
$180K2.7%
$190K0.7%
$200K0.8%
$210K0.5%
$220K0.2%
$230K0.1%
$240K1.6%
$250K0.3%
$260K0.2%
$270K0.1%
$280K0.1%
$290K0.1%
$300K0.7%
Over $300K2.1%

Users are a mix of single individuals and people in a relationship. In all cases, expected retirement spending is what the household expects to spend annually.

The most commonly-cited expected spending amount is $60,000. Interestingly, this is roughly in line with what Americans spend annually on their credit cards. This suggests that people may be using their current bills to help gauge their future retirement spending.

Median spending, or the middle value when spending is ordered from lowest to highest, falls at $70,000. However, average spending is a fair amount higher at $100,000. This is because the average is calculated by adding up all the expected retirement spending amounts and dividing by the total number of users. Higher expected spending amounts, some in excess of $300,000 per year, skew the average calculation upwards.

Of course, given their higher net worth, it’s perhaps not surprising that many Personal Capital users expect to spend larger amounts in retirement. How does this compare to the general population? According to the Bureau of Labor Statistics, Americans age 65 and older spend about $48,000 per year on average.

Chances of Retirement Success

Once you’ve determined how much you’ll spend in retirement, your next step may be to wonder if your savings are on track. Based on an assessment of Personal Capital retirement planner users, here is the breakdown of people’s chance of success.

Retirement Spending Chance of Success

The good news: more than half of people have an 80% or better chance of meeting their retirement spending goals. This means they have sufficient financial assets and are contributing enough, regularly enough, to meet their expected spending amount. The not so good news: one in five people has a less than 50% chance of meeting their goals.

This problem is even more troublesome in the overall U.S. population. Only 50% of people have a retirement account, and the Center for Retirement Research at Boston College estimates half of today’s workers are unprepared for retirement.

Setting Your Own Retirement Spending Goals

While seeing the goals of others is a starting point, your annual retirement spending will be very specific to you. Not sure where to start?

Financial planners typically recommend that you should plan on needing 70-80% of your pre-retirement income in retirement. This is because people generally no longer have certain expenses, such as commuting or childcare costs, when they retire. However, keep in mind your expenses could be higher if you still have a mortgage, encounter unforeseen medical expenses, or want to splurge on things like travel when you retire.

It requires some upfront planning, but being realistic about your retirement spending can give you confidence in your financial future.

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Navigating Market Volatility: Why ETFs Are Critical Tools

Historically, the trading volume of ETFs has spiked during market volatility. We explore why ETFs are preferred by institutional investors.

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ETFs During Market Volatility

Download the ETF Snapshot for free.

Why ETFs Are Critical Tools During Market Volatility

Investors experienced record-breaking volatility in 2020. During COVID-19 market turbulence, the CBOE Volatility index surpassed the previous peak seen in 2008.

In this infographic from iShares, we explore how ETFs rose in popularity during this time—and the characteristics that make them particularly useful during market volatility. It’s the first in a five-part series covering key insights from the ETF Snapshot, a comprehensive report on how institutional investors manage volatility.

The Methodology

To assess how institutional investors navigated this volatility, Institutional Investor published a report in 2021 based on a survey of 766 decision makers. Respondents were from various types of organizations, firm sizes, and regions.

For instance, here is how responses broke down by location:

  • 21% Asia Pacific
  • 36% North America
  • 29% Europe, Middle East and Africa
  • 14% Latin America

Here’s what the survey found.

Rebalancing During Market Volatility

In total, 90% of institutional investors said they rebalanced their portfolios between the first and third quarter of 2020. How did they do it?

Among all financial tools, ETFs were the most popular vehicle for rebalancing. For instance, ETFs were used by 70% of investors globally, compared to the 51% who used mutual funds or derivatives.

The popularity of ETFs was evident in market activity. From January to March 2020, ETFs as a proportion of total equity trading volume increased.

 January 2020February 2020March 2020
VIX142058
ETF trading volume$95B$136B$240B
ETF as % of equity volume26%27%36%

Based on an average of daily values. Reflects all listed U.S. ETFs across all asset classes.

This trend is true historically as well, as ETF trading volume has typically spiked during periods of volatility.

Want more institutional insights into ETFs?

Global Forecast 2022

Download The ETF Snapshot for free.

The Attributes Driving ETF Usage

Why are ETFs preferred by institutional investors? They offer three key characteristics:

  1. Liquidity: ETFs make it much simpler to buy and sell large portfolios instantly, instead of trading individual securities.
  2. Transparency: Among multi-asset managers, transparency of holdings is the top reason for using ETFs. A clear holdings breakdown helps these managers achieve exposures to particular asset classes, sectors, and styles.
  3. Efficiency: ETFs can be traded quickly. They typically also have lower transaction costs relative to the underlying basket of securities.

Based on these key benefits, ETFs were an invaluable tool during extreme market volatility.

Growing Momentum

ETFs are also poised to help institutional investors navigate the market going forward. Globally, 65% of institutional investors plan to increase their use of ETFs in the future.

In fact, this is already coming to fruition. As of September 2021, the average daily trading volume of ETFs was up more than 5% compared to 2020.

Evidently, ETFs play a critical part in helping institutional investors achieve their goals.

Download the ETF snapshot for free.

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