Rejoice—people around the world are living longer! But pause the festivities—that means they need more retirement money. To ensure they don’t run out of cash, savers need to adjust their investment strategies as their needs change, both before and after retiring.

The gap between what people save for retirement and what they need for a longer life is widening. According to a study by the World Economic Forum (WEF), that gap is likely to increase from $70 trillion in 2015 to $400 trillion by 2050 in eight countries—Australia, Canada, China, India, Japan, the Netherlands, the US and the United Kingdom.

In human terms, this means the average Japanese woman will outlive her savings by about 20 years, and the average British woman by nearly 13, the WEF reports. Average American men and women can expect to outlast their retirement funds by eight and 11 years, respectively (Display).

Reducing Risk Too Early

Retirement doctrine dictates that people should invest aggressively when they’re young and more conservatively as they get older. But pumping the brakes too soon is a huge risk. The WEF study, Investing in (and for) Our Future, found that reducing exposure too early to “return-seeking assets,” such as equities, real estate investment trusts (REITs), high-yield debt and emerging-market debt, dramatically reduced retirement savings.

The report modeled outcomes for common default options of defined contribution retirement plans in each country. Those with longer exposure to return-seeking assets built larger nest eggs.

The most extreme example is Japan, where savers invest mostly in defensive assets, including cash, for most of their lives. The top 5% can expect to save only 4.4 times their salary at retirement. In the US, even the bottom 5% of savers can expect to pile up 3.9 times their ending salary by the time they stop working. The difference? The typical US target-date fund invests more than 50% of assets in equities until retirement.

Premature risk aversion needn’t last a lifetime to have consequences. The model portfolios in the US and the Netherlands both start out with about 90% of retirement funds in return-seeking assets. However, typical Dutch retirement plans shift almost entirely into defensive assets between ages 55 and 65, while American plans do not.