Nov 9, 2014

Retirement Age Development

Due to the continuous ageing process and a strong ongoing growth of life expectancy, countries need to increase their formal retirement age.

Actuarial calculations show  in general that - in order to keep pensions affordable - the formal pension age for future generations will eventually have to increase to the age of 71 or even 75 years.

However, lifting up the retirement age is not an easy process, as people have grown up with the concept of a steady retirement date, all their life. As if 'work is slavery' and life only really starts at your pension date, when you abruptly stop working and live a life behind the window of your apartment...

However THE pension date doesn't exist, it's an illusion, a fata morgana...

Not only that retirement increases the age-related decline of health and cognitive abilities for most workers, it also increases your mortality rate, as a RP-2000 Mortality Study shows:

Secondly, nobody - not even an actuary - can predict the outcome of a pension plan over a period of 60-70 years. Pension dates and and long term pension outcomes are by definition unsure.

OECD Retirement Ages
What we can do is keeping the retirement age in pace with the development of our life expectation. This is exactly what some OECD countries have done, as the next chart shows:

Of  course, the optimal retirement planning depends on several economic en demographic developments in a country.

On the OECD page you can play and compare several pension-related variables across different countries.

Enjoy playing and learning from these OECD data.

- Unhealthy Retirement (2014)
- Does working longer increase your lifespan? (2010)
- OECD Page