OECD: Governments Must Raise Retirement Age
Posted on Jun 12, 2012
A new report issued by the Paris-based Organization for Economic Co-operation and Development reached the completely unastounding conclusion that pension systems in aging economies will soon become insolvent given the current retirement age. It advised countries with aging populations (the United States, many European nations and Japan fall into this category, among others) to raise their retirement age to account for these demographic changes.
Altogether, the OECD report recognized an entirely predictable problem. When Social Security was created, the retirement age was 65 and life expectancy was 62. Now, the retirement age is 67 and life expectancy is 79. When the demography changes nine times faster than government policy, it’s very easy to see that there might be a issue. Politicians are aware of the problem (the Congressional Budget Office released a similar report in January), but there isn’t enough political capital in the universe for Congress to force a large group of retirees to postpone benefits for a meaningful amount of time. Frankly, barring a radical change away from the me-first attitude of American politics, the situation looks grim.—CN
As life expectancy continues to rise, a new report suggests that governments need to raise the age of retirement in order to keep up.
The Organization for Economic Co-operation and Development said that by 2050, the average woman and man can expect to live roughly 24 and 20 years beyond retirement age respectively, up from 20 and 17 years in 2010. At the same time, retirement ages across many countries have stayed the same.