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. Last Updated: 07/27/2016

An Aging Population Poses Pension Problem

VIENNA -- Heaps of dumplings and schnitzels. Free drinks. A three-man band. It's party time at a Vienna retirement home -- but two women in the silver-haired crowd just can't get into the mood.

"What's the world coming to? It's all about work and money nowadays," says 86-year-old Elfriede Kobsa.

"Yes, whatever happened to having a family and children?" sighs Elisabeth Nagl.

Good question.

The statistics speak for themselves. By 2010 -- just four years from now -- there will be more 55- to 64-year-olds than 15- to 24-year-olds in the European Union, Austria's social affairs minister warns.

The growing number of older Europeans, coupled with low birth rates across the 25-nation bloc, is giving lawmakers a big headache. At issue is how to financially shoulder the burden of an aging society while staying competitive globally and finding workable incentives for people to have more babies.

"It's getting worse and worse. If things continue like this, no one is ever going to get to retire," said Roni Howath, 56, a former Vienna postal worker who retired early and now drives a cab from time to time to supplement his monthly pension.

In the past, European taxpayers relied on generous national pension plans fueled in part by those still working. But in recent years, many governments have made severe cutbacks amid fears that with fewer people paying into the system, there will be less money to dole out.

Experts say the impact of an ever-grayer Europe will be felt throughout society. According to a recent EU report, the bloc's working age population is projected to fall by 48 million, or 16 percent, between 2010 and 2050, while the number of seniors is expected to rise sharply by 58 million, or 77 percent. Europe will go from having four people of working age for every senior citizen to a ratio of two to one by 2050, predicts the report by the Economic Policy Committee and the European Commission.

"Without exaggeration, one could say that what is going to happen on average in the next 25 years is really something we have never seen before," said Bernd Marin, executive director of the Vienna-based European Center for Social Welfare Policy and Research. "It has implications for everything."

The changing demographics could put Europe at a competitive disadvantage with the United States, where birth rates haven't taken a nosedive -- in part because of the growing Hispanic population.

Hispanics accounted for almost one-half of the U.S. nationwide population growth of 2.8 million between July 2004 and July 2005, according to U.S. Census Bureau figures.