By Katherine Chiglinsky | Bloomberg

“A lot of the good solutions already exist somewhere in the world. Just no one has figured them out all together,” said Michael Drexler, head of financial and infrastructure systems at the World Economic Forum. “There’s almost no new invention necessary.”

Longer life spans and disappointing investment returns will help create a $400 trillion retirement-savings shortfall in about three decades, a figure more than five times the size of the global economy, according to a World Economic Forum report.

That includes a $224 trillion gap among six large pension-savings systems: the US, UK, Japan, Netherlands, Canada and Australia, according to the report issued Friday. China and India account for the rest.

Employers have been shifting away from pensions and offering defined-contribution plans, a category that includes 401(k)s and individual retirement accounts and makes up more than 50 percent of global retirement assets. That heaps more risk onto the individuals, who often face a lack of access to the right options as well as the resources to understand them, according to the World Economic Forum report. Stock and bond returns that have trailed historic averages in the past decade also have contributed to the gap.

Full Content: News Herald

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