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Projections of population size, growth rates and age distribution, although extending to distant horizons, shape policies today for the economy, environment, and government programs such as public pensions and health care. The projections can lead to costly policy adjustments which in turn can cause political and economic turmoil. The United Nations projects global population to grow from about 7 billion today to 9.3 billion in 2050 and 10.1 billion in 2100 while the Old Age Dependency Ratio doubles by 2050 and triples by 2100. How are such population projections made, and how certain can we be about the trends they foresee?

The US population will age rapidly for several decades and then more slowly, with less aging than most rich nations. Health of the elderly has greatly improved, but disability stagnated after 2000. Retirement age reversed its decline in the mid-1990s and health status leaves ample room for increased elder labor supply. Many older people have inadequate retirement savings and face additional risks including uncertainty about both public and private pensions and health insurance. Population aging may cause a small decline in rates of return. The main problem is the impact of population aging on public programs for the elderly.

Contributors: C.-B. An, J. Bravo, M. Bucheli, A. Chawla, Q. Chen, Y.-J. Chun, A. Collado, G. Donehower, R.I. Gál, V. Gergely, E.-S. Gim, C. González, D. Hallberg, M. Holz, N. Hwang, Y. Jiang, F.A. Kluge, L. Ladusingh, N.M.S. Lai, A.O. Lawanson, R. Lee, S.-H. Lee, L. Li, T. Lindh, J. Mala i, Maliki, A. Mason, R. Matsukura, M. Medgyesi, I. Mejía-Guevara, T. Miller, M.K. Muriithi, R.G. Mutegi, G. Mwabu, M.R. Narayana, G. Öberg, N. Ogawa, O. Olaniyan, C. Patxot, M. Phananiramai, A. Prskawetz, B.L. Queiroz, R.H. Racelis, E. Rentería, E.L.G. Rios-Neto, L. Rosero-Bixby, J.M.I. Salas, J. Sambt, M. Sánchez-Romero, G. Souto, A. Soyibo, C. Thulstrup, A.-C. Tung, C.M. Turra, R. Vaittinen, R. Vanne, P. Zúñiga-Brenes.

Even over a 75-year horizon, forecasts of PAYGO pension finances are misleadingly optimistic. Infinite horizon forecasts are necessary, but are they possible? We build on earlier stochastic forecasts of the US Social Security trust fund which model key demographic and economic variables as historical time series, and use the fitted models to generate Monte Carlo simulations of future fund performance. Using a 500-year stochastic projection, effectively infinite with discounting, we find a fund balance of −5.15 per cent of payroll, compared to the −3.5 per cent of the 2004 Trustees' Report, probably reflecting different mortality projections. Our 95 per cent probability bounds are −10.5 and −1.3 per cent. Such forecasts, which reflect only 'routine' uncertainty, have many problems but nonetheless seem worthwhile.