In the latest in a series by Age Concern looking at the challenges facing senior citizens, Cordell Riley looks at how a shrinking working population will have to financially support many more people ...The western trend of an ageing population has not escaped Bermuda. In 2010, the population of seniors, persons aged 65 and over, increased to 14 percent from 11 percent, or from 6,722 to 8,678 persons. This ageing of the population will have far-reaching impacts for Bermuda as a whole and it is important to understand them so appropriate policies and procedures are put in place to effectively manage them.More seniors to supportThe most common impact of an ageing population is a rising dependency ratio. The dependency ratio can be expressed as the number of people under 18, plus the number of people over 64, divided by the total working population (and expressed as a ratio out of 100). Bermuda’s dependency ratio is likely to increase from about 44 percent in 2000 to an estimated 55 percent in 2025. In its basic form, this ratio expresses the extent to which the working population has to carry financially, those segments that are unable or least able, to care for themselves. The lower the dependency ratio, the more favourable a position to be in, as this means that there is a larger working population taking care of a smaller dependent population. Forty four percent is acceptable and in line with other western countries.By 2025, Bermuda’s dependency ratio could reach 55 percent, meaning that a shrinking working population will have to carry financially many more persons who are least able to care for themselves.It is also estimated that by 2025, those over 65, will outnumber those under 18, most likely for the first time in recent history. This phenomenon has major implications of which policy makers and other stakeholders should be aware:Fewer people to pay taxesA shrinking workforce means fewer payroll and other taxes, and fewer payments being made into pension plans. At the same time, pension payments will be increasing.Higher health expensesSeniors have a higher propensity for ailments than their younger counterparts, so health costs are likely to increase as well as contributions to health insurance, from that same shrinking workforce. Since seniors are living longer, those costs will have to be sustained over a much longer period of time.Less young peopleWith tax revenue most certainly declining, Government will have to find creative ways to raise funds to meet the needs of seniors, in addition to the rest of the population. At the same time, as the younger population steadily decreases due to declining fertility rates, services geared to them will have to decline as those to seniors will have to increase. School closures, for instance, are highly possible and day-care and other such facilities for seniors are expected to be in greater demand.Blacks may have to work longerThere are also some other demographic trends to watch. Rising costs and insufficient pensions mean some seniors will have to work into their retirements years. This is likely to proportionately more blacks than whites. Blacks are likely to comprise 60 percent of the ageing population, with whites accounting for some 27 percent. Whites tend to be wealthier than blacks so they may be financially able to support themselves in their twilight years. Blacks, on the other hand, if they are able, may have to continue in the workforce well beyond retirement years, making senior labour force participation rates, the proportion of seniors working out of all seniors, complementary to labour force participation rates for the general population above 70 percent. We already see examples of increased levels of seniors, typically beyond the age of 70, in the workforce.More females living aloneThere are likely to be more senior females living alone. Females are expected to outlive males by at least five years. This will necessitate the need for more secure, group-living facilities.What’s the plan?In order to address the issues of an ageing population, planning, which is likely to have already begun, is critical. How will the government raise the funds necessary to deal with the increased senior needs from a shrinking working population? How will medical costs be kept in check? What will be the quality of life be like for seniors who remain in the workforce well beyond the age of 65? How will the community respond to smaller schools and more children in the classrooms? There are many questions for which answers must be found.Some Western countries, however, are not too concerned about the ageing population. They take the view that medical advances will provide seniors with more productive years and that they will be better able to care for themselves than some previously had thought, lessening the financial burden on the community. This could prove to be true, but so is the old adage: “Fail to plan, plan to fail.”