Social Security: Declining Italy Needs a Bambino Boom

May 31, 2023 By E.J. Smith - Your Survival Guy

By TravnikovStudio @ Shutterstock.com

Your Survival Guy just got back from Rome, and it’s a wonderful city. But something is missing. The “bambinos.” Italy is facing a crisis in its birthrates that aren’t nearly high enough to replace those Italians who are dying or migrating out of the country. CNN’s Barbie Latza Nadeau, Valentina Di Donato, and ANtonia Mortensen report:

Italy, a country once known for its big families gathered around the dinner table, is facing a crisis of unparalleled proportions.

For the first time, the number of births in a year fell below 400,000 – representing an average of 1.25 babies per woman, according to official figures for 2022.

This means that the replacement rate is now negative, since the number of deaths currently exceeds the number of births – 12 deaths for every seven births.

Italy is the world’s 8th largest economy and has a population of just under 60 million. In 2022, the southern European country registered just 393,000 babies, according to the Italian National Institute of Statistics (ISTAT), the lowest since records began in 1861.

Babies born in Italy to unregistered migrants and to some same-sex and heterosexual Italian couples who used surrogacy abroad are not automatically part of the official record, according to Italy’s national birth registrar.

And if the trend does not reverse itself, the country could face an economic “dark age,” as there will be a decline in the number of people entering the workforce even as more people retire.

“In our pension system, which is a pay-as-you-go system, where the current workers pay for the pension benefits of the current retired people, this will create a big challenge and burden,” Maria Rita Testa, a professor of demography at Luiss University in Rome, told CNN.

“The projections by the government show that the peak in terms of pension spending will be reached in 2044,” Testa said, to meet the needs of the large baby boomer generation.

By 2030, Italy can expect 2 million workers to have entered retirement with no corresponding new members of the workforce to pay their pensions, according to Testa.

Action Line: Italy isn’t the only country facing a tough demographic future. In many countries across the world, younger generations aren’t growing fast enough to support the pensions of older generations. That makes it more important than ever to save til it hurts. Programs that rely on new workers entering the system to support retirees—think Social Security and Medicare—could face trouble with payouts in the future. Focus on securing your own retirement future. When you want help, let’s talk.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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