Pension Dependency Ratio Simulator

Demographics

Birth rate 12.0 /1000

Life expectancy 78 yrs

Policy levers

Contribution rate 15%

Target benefit level 50%

Retirement age 65 yrs

Live readouts

Year

Dependency ratio

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Workers

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Retirees

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Sustainable benefit

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Target vs. sustainable

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How it works

A pay-as-you-go (PAYGO) pension pays today's retirees directly out of today's workers' contributions — nobody draws down their own personal pot. That makes the whole system's math collapse into one identity: the benefit level it can sustainably pay, as a share of the average wage, equals the contribution rate times the dependency ratio (workers ÷ retirees).

sustainable benefit% = contribution rate% × (workers ÷ retirees)

Each decade you advance, newborns enter at rate birth rate and every cohort's survival to the next year is governed by life expectancy (a smooth curve centered on that age). As birth rate falls and life expectancy rises, the population pyramid tips top-heavy: fewer new workers enter while more people spend longer years retired. The dependency ratio falls — and with the contribution rate and target benefit held fixed, the sustainable benefit falls with it, opening a shortfall.

Contribution rate — raise it and today's shrinking worker base pays proportionally more per person, closing the shortfall directly.
Target benefit level — lower it and retirees simply receive less, which also closes the gap without touching workers.
Retirement age — raise it and some near-retirees stay counted as workers instead of retirees, improving the dependency ratio itself and lifting the sustainable benefit on both sides of the ledger.

The population bars on the left show every age cohort (0–100); green is working-age, amber is retired, grey is too young to work. The balance beam on the right tips toward whichever side — contribution revenue or target benefit cost — is currently larger.

Year 0

Pre-working (0–17) Workers Retirees

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