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U.S., Germany, Italy growing old fast, which poses challenges, report says
At the end of WWII, the United States, Italy and Germany each had about the same elderly population. Now a new Pew report examines what family support looks like in each of them and what America might learn from the others. - photo by Lois M. Collins
The percentage of Americans over 65 will nearly double by 2050, following the path of Italy and Germany, where the populations have aged faster. Now a report from Pew Research Center suggests that comparing the three countries might offer insights into what's ahead for the U.S. in terms of government support and intergenerational support within families.

"Family Support in Graying Societies" looks at the different attitudes the three countries have toward government support, challenges of the so-called "sandwich generation," life satisfaction, retirement and more. The researchers surveyed 1,692 Americans, 1,700 Germans and 1,516 Italians in late 2014.

"The reason that we chose those countries is that after World War II, demographically, the United States, Italy and Germany looked pretty similar in the percentage of people age 65 and older, at one in 10," said Juliana Menasce Horowitz, associate director of research for Pew and a report author. "But they have taken different paths over the years, in part because of the relatively high fertility rate in the U.S. and higher immigration rates."

That has meant those who are 65 and older in the two European nations make up 21 percent of the population, a demographic event the United States is preparing for around 2050. By then, one-third of Italians and Germans are expected to be at least that old.

"This is a glimpse into our future in some ways," Horowitz said.

Government support

The Western Europeans are more likely to see government as partly responsible for citizens' well-being, through social-support programs, the report found. "Western Europeans tend to take the position that government has a large role to play, while Americans generally tend to take a more individualistic approach," said Horowitz. Most Americans say primary responsibility for those with needs falls to their families and the individuals.

Regardless, those surveyed in all three countries doubt that programs like Social Security in the U.S. will be able to help them at the program's current level when they retire, the analysts found. And some doubt they'll receive any benefits at all.

Half of Italians do not believe their country's version of Social Security, called Previdenza Sociale, will give them anything. Forty percent of Germans have little faith their program, Gesetzliche Rentenversicherung, will help. Similarly, 40 percent of Americans have the same skepticism about Social Security.

Horowitz said she found it interesting that in both Germany and Italy about 70 percent of the income for older people comes from public programs, while in America it's only 38 percent.

"Older Italians and Germans are relying in large part on the government through social security programs, but very few of them expect to get the same level of benefits when they do retire. But they believe they should," she said.

Young vs. old

The Pew survey found that most people in all three countries feel a sense of responsibility to help both older parents and adult children who struggle in some way. But more of them emphasize responsibility to care for and to help elderly parents.

Even so, financial help flows to the adult children more than to the aging parent.

That fewer adults help their elderly parents financially is not surprising, said Horowitz, given that a wealth gap between generations is well documented, particularly post-recession. Older people have more financial resources and they also have access to more social support programs than younger adults do.

All three of the countries also have a "sandwich generation," people in their 40s and 50s who are caring for elderly parents as well as providing some financial help to adult children or still caring for young children. In Italy, 64 percent of those in that age bracket fit the sandwich generational description, compared to 47 percent in the United States and 41 percent in Germany.

"They have pressures coming from both the younger and older generation in terms of their time and their financial commitment," said Horowitz. "And it's interesting because when we ask questions about satisfaction with family life and different areas of their lives, they are just as likely as other Americans, Germans and Italians to say they are happy with family life, despite the added burden."

Still, those pressed between the two generations are more likely than those with adult children, but not aging parents, to say it's stressful to help the adult child, Horowitz added.

More than half of those surveyed in each country say they have felt less stress as they've gotten older. Married older adults are typically more satisfied with family life than their unmarried counterparts in each country, as well.

Italians are the most apt seven in 10 to report that they have daily contact with adult children who don't live with them.

Global challenges

"The most certain challenge posed by the aging of the population is how do you ensure a decent standard of living for the old without putting a crushing burden on the young," said Richard Jackson, president of Global Aging Institute and a leading authority on aging populations.

"Graying means paying paying more for pensions, more for health care, more for long-term care, more for social services for the elderly," he said, adding many countries are responding to projected growth in programs for the elderly by cutting benefits dramatically.

The worry, he noted, is that they will "start out with a big fiscal problem, but maybe in the end they wind up with an adequacy problem," leaving tomorrow's elderly impoverished.

Italy, faced with dire projections, has already announced massive cutbacks. Jackson said whether they occur is to be seen, since those who must live with cuts will form an aging electorate that may push back at the ballot box. Other solutions are for workers to save more during their working life and to work longer.

"The longer you work, the fewer years of retirement you have to fund," said Jackson. "That's good for the economy, good for the adequacy of retirement income and most gerontologists say it's good for the elderly themselves."

Saving for the future

Most German and American adults say they're saving for retirement, 61 percent and 56 percent, respectively. For Italians, it's a different story: three-fourths are not, even if they're getting close to retirement age. The more financially secure someone is, the more likely he is to be saving regardless of which country, the report said.

In none of the countries do adults up to age 29 save for retirement.

The report said more than half of those surveyed helped an adult child financially with something during the past year.

Americans are the most likely to try to leave their kids an inheritance. But a majority in all three countries don't believe it's a responsibility to do so.

Jackson emphasized that Americans are in a somewhat different and more hopeful position than Italy, Germany and other nations that have aged hard and fast.

"We are the youngest developed country today and will be the youngest by an even wider margin after the last of the baby boom generation passes into that great Woodstock in the sky," he said. "Our median age is 36, heading for 39. Japan's is 43, heading for 57."

The United States will be the only major developed nation with a growing workforce and growing population, he said. Thanks to a comparatively high fertility rate and substantial net immigration, which keep age down, it will be no older than those other countries already are.

But Americans "labor under a couple of self-inflicted handicaps," including a low national savings rate, a very expensive health care system and "a political culture that seems incapable of making realistic adult trade-offs with competing priorities," he said.

Central, Eastern and Mediterranean parts of Europe have had to deal with the challenges of aging. "We have not been compelled to make the adjustments yet," he said.