Much of the developed world is having a population crisis. When pensions/government benefits were created in the early 20th century in the US, western europe and japan, they were experiencing population booms.
Take japan for example, which is similar to US/Western Europe.
Japan seems to have maxed out and now they are dying quicker than they are being born.
This is the same problem in most western europe countries. In the US, it's not as bad because of immigration, but if you only include native born americans ( non-immigrants ), our population demographics is even worse than japan. Native born americans stopped procreating at replacement levels since the late 1960s.
Unless Japan/Western Europe bring in millions of immigrants, they are going to be in for major problems because of their liabilities to retirees. A shrinking population can't hope to support the older generation. And the worst part is that if younger generation has to support the older generation, they will put off have kids because they simply can't afford them. Which in turn exacerbates the problem and it turns into a vicious cycle.
But immigration also has its own problems. So the industrialized world is caught between a rock and a hard place.
Even in the US, the pro-immigration policy is a stop-gap measure. The population can't grow forever.
Blackrock has an interesting paper on the overall trends.
Retirees in the 2040's are going to see less resources-per-GDP dedicated to them than retirees in the 1980's for sure. But then they'll also have pervasive VR headsets and a plausible cure for cancer handy, so I'm guessing it'll be a wash.
Heard of the 1929 stock market "crash"? It was actually a dip in stock price by a mere 30%.
Time frames matter. The demographic change we're talking about is going to happen over the next 40 years, it's not like Black Tuesday.
To be fair not all of that is per-unit health costs increases; much of that is due to longer life expectancy.
Yes it can, it's just a matter of productivity.