Is the concept of a universal "retirement age" feasible?

So, there's a lot of discussion surrounding the issue of pensions at the moment, but I'm not sure that we're asking the right questions. The debate so far seems centred around what age people should be able to retire, rather than whether the concept of a retirement age is workable.

As medical technology and the quality and availability of healthcare improves people can expect to live 20 to 30 years past their retirement, in relatively good health. I believe this is not only unsustainable, but unfair.

Don't get me wrong, I support the concept of a pension, but I think that it's purpose should be to ensure that people can live out their lives in dignity when they become physically and/or medically unable to continue working.

Any thoughts?

 

I agree that people need to get realistic about pensions, but I do find your idea a tad crazy. Your effectively penalising those who are healthy and forcing them to work and making pensions a glorified incapacity benefit. Not only that, older workers will simply fill positions that younger workers could do because they are too "healthy" to retire.

 

You're right in saying we arn't asking the right questions - in fact, you aren't event asking the right questions.

The question is simply: As we all live longer, and as the the 'baby boom' generation reaches retirement one of two things must happen:

1 - We must pay higher taxes to support the massively increasing pension burden.

2 - We scrap pensions and you're on your own.

This is compounded by the fact that the UK is one of the few counties in the world that has a birthrate below the rate of replacement (currently 1.8) - this means that each women is, on average, having 1.8 children, which obviously isn't enough to replace both said women and daddy. Meaning that the biggest generation of this country are currently (on average) in their 50's and just starting to hit their 60's and that the next generation have got to pay for them at some point.

In short, give it 10 years and we're looking up **** creek




Scenario one is most likely simply because pensioners tend to have a very high percentage voter turn out, and lets be honest here, politicians are some what in the business of pleasing the largest voting cores.

There is of course secret answer number 3, which will not be given the discussion it deserves simply because any polotician that suggests it will be mobbed by this countires overspoken facist anti-immigaration gang. Option 3 you ask? Increase immigration to the extent where there are enough people of working age to cover the cost of those of retirment age and the rate of replacement is stablised thus ensuring that's there's always enough people - sadly this would be seen by most as political suicide.

 

It's a bit impractical to generalize lifespans. At any time a person's life serious health concerns can hit without warning, at higher ages this becomes even more true.

Just judging by physical health when a person is "due" could lead to all sorts of problems. Bias in determining health on the employer's/state's side, or bias in doctors creating various results for the same person. It also fails to compensate for the risky nature of an elderly person's health. Problems can hit quick, and they can come from out of the blue.

Universal retirement ages serve to give people a break after a lifetime of work. Most pensions and retirement benefits must be earned and aren't some free lunch. It may also serve to show an employer's respect for the employee's dedication if the pension is provided by the employer. In the workplace they also allow for keeping interruptions from employee's health from affecting other workers. It's pretty hard on morale to see Ol' Steve who always seemed so healthy working til he's 70 and dying on the job of a massive heart attack. It's also hard to replace employees who go and die on you with no form of turn-over and no warning so that replacements may be interviewed.

 

I'll go again with how difficult it is to generalize lifespans. But also just as difficult is how to give a decent standard of living.

I'm a disabled person living in a small town in America. Because I worked a fair bit before being disabled, I will collect about 780 a month for the rest of my life, given the way they're refusing cost of living increases. It works out to around 9k and change a year. Well below the poverty level. It's not as though I'm on disability for any "mental illness," as people decry around here (but real clinical depression is just as bad as some ailments, I can attest) but because I have a bad heart. I have NO way to continue to work, as walking 20 yards starts to hurt between it and my arthritis.

So, I'm 29 years old, and terminally ill, and I'm not given enough to live on. Oh, and in my state, I have to wait TWO YEARS for Medicare.

So yes, something needs to be done. But what?

 

Option 4 would be to scrap automatic retirement at an arbitrary age, and instead, introduce a system whereby, when a person becomes unable to work any more, society ensures that they can live out the remainder of their life in a dignified way.

Once again, I'm really sorry to hear about your illness. I would like to see free-of-charge universal healthcare and a guaranteed minimum income from the state (for anyone who is unable to work, for whatever reason).

 

I've still got over 40 years before i could potentially retire, but i get the feeling that the limit is just going to rise and rise. I don't want to work till i'm 70, or even 80, frankly, 65 sounds bad enough.

Sam

 

I'm semi retired at 56 lol I've worked day and night since I was 14 in one trade or another and then for myself and TBH You are your own worst boss .

There come's a time in your life when you need to have a life not working your arse off till you die or too old to enjoy whats left.

 

complex issue and one, i agree, in which we must acknowledge both fairness and sustainability. the old model doesn't work anymore (and was far from perfect to begin with) and the lifestyle concept of retirement needs an overhaul as well. how many people really stop working (apart from those with physical or mental limitations that bar employment/volunteerism of any kind)? maybe we don't want to work for "the man" any longer, but do we stop "working" on anything? i know retirees who make significant daily contributions to organizations (and causes) important to them.

maybe the key to sustainability lies in adjusting notions of what is valuable and then creating incentives for staying actively involved in creating that value.

 

First off, this discussion is rather short sighted as it really only pertains to the US, Northern Europe and Japan. In most places, people generally work until then simply can't anymore or close to it. More often then not, they rely on family rather then a nice pension after their bodies are shot since the pension or government plan usually isn't able to support them. And the populations are still growing by generation.

Second, relying on a pension or government support is totally naive. It should be just a part of your retirement plan. Savings and investments should be the other 2/3rds of it.

That being said, if I can afford to retire at 40, 50 or 60 due to making the correct financial decisions, then I should be able to do so. What is or isn't good for society, or whether or not I still am physically able to work is besides the point. Unfair or not, I get to make the call since I made the money and the choices.

But you have to also realize that when most workers started in the workforce, they had an understanding with society. They worked until a set age, and then were allowed to retire. To change the rules now, is to break that pact. If anything, we should reset the rules, but only for those that are entering the workforce now. After all, the people set to retire shouldn't be punished for making life better and longer. Unless you are French.....screw the French.

Start a well thought out saving and investment plan now, and you won't have to rely on a pension. Find what it is you want to do in life and pursue it for as long as you want, where ever you want. Thinking about how long you have to slave away at a soul sucking job will kill you faster then a Happy Meal will.

Bingo!

 

I agree 100% Johnny, but for too many people it's live it up, spend spend spend, and when they can't work anymore, cry to the government and/or family for handouts, fake a disability, a bit of crime perhaps, etc.

I hope this sort of problem magically just goes away

 

This part remembers me of the huge flop a bank had here in Portugal and the fact that the savings of lots of people suddenly disappeared... leaving people that were in their retirement, or on the edge of their retirement, living on scraps or making them dependent on their families.

Savings are a good idea, but are the banks stable enough?

 

It's not very safe to have all your eggs in the one basket, and I wouldn't have alot in cash/liquid savings anyway, since money loses it's value every year with inflation... unless you are actively trading currency or something like that, but just leaving cash sitting in the bank, earning a little bit of interest, minus inflation = little or even negative growth.

Not that investments with high returns and high growth are obvious or risk free however

 

As an non-French EU citizen currently living and working in France, I'm experiencing this retirement ******** both from the inside and outside.

The concierge of our building is a woman. Her husband retired one day before we moved in. He was a firefighter, from when he turned 18 to when he turned 55 (and retired). He deserved to retire at 55: shift work, dangerous work, work to serve the people. He gets to have ten, twenty, thirty, even fourty years more. (He nearly died six months ago, though.)

Retirement at 65 is the limit. The government simply cannot push it up even further. The median age expectation for Europe is about 73-75. Ten years or under of chilling out for 45 years of working is ******** already.

There's no money for retirement here in France. But there is money for HADOPI (12 million euros for 2011), there's money for the "carte musique" (50 euros worth of music downloads; 25 euros paid by the user, 25 euros paid by the taxpayer). There's money for the president, who doesn't pay any rent/food/transport; and for the retired presidents', ehm, retirement payments (their wage as president). There's money to pay the exorbitant wages government ministers get.

But there's no money for us?

People in government retire whenever the hell they want. We don't. And we actually work for a living.

The strikes and manifestations here in France may end up ruining my travel plans to visit my family in another country (which I can barely afford because I lose so much money paying for "retirement"/unemployed people/government ********) but I fully support them. Retirement at 55 for shift workers and 65 for nine-to-five workers is fair - making it a later age the people can retire is just pissing in people's faces.

If the general retirement age goes up, the government's (president, ministers, etc) retirement age should be exactly the same. And their wage should be cut by a lot, to make it akin to ours, the proletariat's. As long as that doesn't happen, expect strikes. Or a second French Revolution, which is going to turn out really nasty.

 

One of the benefits of benefits of choosing a bank that is insured, I suppose. But mvagusta is right, even in the bank, your money should be working for you. There are tons of low risk ways to keep ahead of inflation.

 

"The obese child dies at 54 and the pensions crisis disappears" --Caitlin Moran

And you thought it was all bad.

Perhaps there is too much black-and-white thinking going on. We cannot reneigh on the pension arrangements of the current retirees --they started work in the 1950's when things looked very different. They worked their asses off (mostly) to create economic wealth for current greedy bankers to piss it away and to generate a societal quality of life for the current spoiled generation to claim as a birth right as they are killing their hearts and livers with fat and alcohol (because the NHS will fix those for them, on demand, free of charge).

For our generation things are different however. We are healthier and live longer --fruit of the labour of the currently retiring workforce. We enjoy the benefits; perhaps we should also pay the price.

Working generally is not nearly the body-and-soul breaking graft it used to be. We have better conditions, more rights, equal(ish) pay, health and safety. Stuff the previous generations fought for. We have had unprecedented access to education so we could build a career rather than just hold down a job like our dads and granddads before them. It is not their fault if we pissed it away on Media Studies.

On the other hand you can't turn future pensions into a glorified incapacity benefit. Apart from the fact that judging who is still fit to work is a flawed process at best (DWP deemed one of my cancer patients as fit to work as he was in a hospital isolation room having a bone marrow transplant) you are penalising those who have looked after themselves and are rewarding the obese boozing couch potato slacker.

Perhaps the solution lies somewhere in the middle. It has been commented before that retirement is a rather sudden and brusque transition in life style that can leave people feeling at a loss. So why not retire people part-time? as you reach 65, you work 3 days a week and get pension for the remaining 2. At 70 you work 2 days. At 75 you retire fully. As you work part-time you mentor and train the next generation of employee who is taking over your job full-time. Sorted.

As for savings and investments: that is very nice for those who have income to save. Some families barely break even. Moreover most people do not have the business knowledge to prevent being ripped off by mis-managed pensions companies or losing their savings to a bank going belly up --if the interest rates are high enough to even gather them a return.

The previous generation was able to ride the property boom. That has now changed. Already people are struggling to get on the first rung of the property ladder. The next generation will be the first one which won't be able to afford to buy. The housing market is due to crash big time. So pensions may be all that people have. And the only way to safeguard that is to work for it now and consider that we have it better than our parents. And of course, there's always Caitlin'spoint of view.

 

Agreed, but I sense undercurrents of bitterness....

Also agreed. Damn those media studies people and their wasted lives.

Yes, yes, but why ruin it all with a logical approach?

While true, it's also fairly easy to educate yourself about these things, if you care enough to. Nothing is secret, nothing is magical about a sound retirement plan. There are 1000's of books written on it, and plenty of ethical professionals to help. And, to bring it into perspective, the most recent economic crisis showed that there were a few, large bad apples. But no one was willing to compare them to the overall market and realize that 90% of companies aren't mismanaged; that there are still very stable banks to use and solid saving/investments to be made. And even with low income families, there are solutions out there that can have a long term benefit and allow wealth creation, if started early enough. The access to these resources isn't hidden behind reams of paper. I would hold (and this surprises even me) the US military as one example. The make it very easy for low income soldiers to save and invest small amounts of money over the long term (compounding interest is real). My parents were a classic example, and they used it even when there wasn't enough money for food (thankfully, before I was born). After my father retired and went into the civil service, they continued the habit. Now, I can honestly say, they are comfortable with a stable income set for the remainder of their lives (guessing they have 30+ years left in them...ok maybe not my dad, but my mom is going to be around for a while). And what they did, and how they did it; it's all available on the web, at most good social services offices, at seminars for low income families, from volunteers (find a good business school and I bet they have a financial out reach program). You can't shovel this down people's throats, but I know first hand that it works, and it's doable for a large portion of the populations of the US/EU.

I think the increase on retirement age, phased over 10 years and the implementation of a staggered retirement is the most rational approach. Late, but better then nothing. But, I also think that the education of the public as to how to plan for retirement needs to be improved. There was a time, when Social Security was implemented in the US, that the Government made it very clear that it was not to be relied upon a the only income source in the golden years. Maybe it's something that needs to be brought back into vogue.

 

In Hungary the current retirement age is 65 and steadily creeping upwards, except for military/law enforcement where it's 40 (with at least 20 years of service)

 

I'm a 1960's model myself, but my father (a 1930's model) started work in a brick factory at 14. He worked his way up to finance admin at the police force through adult education. My mother (another 1930's model) was not allowed to go to college because "girls got married anyway"; a decision she felt rather bitter about especially when my parents divorced and she had to work to make ends meet.

Me, I took notes on the value of education=money+power+social status. I was able to go to (state subsidised) University on an easy-repayment-terms student loan. There I obtained a real qualification for a real profession. When jobs were scarce in Holland, I emigrated to the UK to find a job there.

I was inspired by stories of my father going cold and hungry as a child, being handed his first orange ever by an occupying German soldier, walking to school with one eye on the sky for V1 doodlebugs flying over, and taking an hour to cycle a few miles home after a day at the brick factory, and my mother, a straight-A pupil, who's life was fundamentally screwed by the lack of educational opportunity coupled with the social expectations of women to get married, have babies and hope to God your husband does not split on you.

I don't have children but if I had, the oldest would have been around 20 by now. I wonder what inspiration they derive from parents who had the privilege to grow up in peacetime Europe, with clean centrally heated housing, equal opportunities, a free health service and education for all, regardless of class, gender or income, limited only by your brain and your willingness to work hard. Do they recognise the value of all that? I'm not sure.

Wasted opportunity, for sure.

One of the few Pretty much the only perk of working in the NHS is a decent pension scheme. I do not expect a state pension to exist any more when I retire. My aim is also to build up as much equity as I can in my property, so that when I retire (to the Mediterranean; the UK is no country for old men) I can buy a nice smaller property there and have some capital left (house prices in the South of France are almost 50% lower than in the UK) so I don't have to touch the NHS pension lump sum.

I'm not so sure about the NHS pension still existing in 20 years either, so in the I am also looking at some compound interest slow-but-sure saving, and alternative ways of generating some income. Luckily, clinical psychology is indoor work with no heavy lifting so I could do some private work/consultation after I retire. Meanwhile I have some insurance in a good death-in-service lump sum payout so if anything happens to me (and working in cancer services that idea is never far from my mind) my wife will still be provided for.

 

I have a degree of envy that you know where you want to retire and have the option of planning for it. There are still too many places to visit and too many options that I have seen to make that choice yet.