Denmark raises the retirement age.
Denmark is set to raise the age of their public pension recipients to age 70 by the 2040.
This was according to new reports out of Denmark and reported on by CNBC.
What does this mean for the rest of nations that operate with this type of system?
Is the US next?
There have been many advocating for an increase in full retirement age here in order to match the program with current times - mainly current life expectancy.
Social Security has its multitude of reported problems and one of them is how long people are living compared to a hundred years ago. For the system to pay out 5 years of benefits is quite different from paying out 25 years.
Simply thought of, yes, raising the age relieves the program and may match better to current life spans. In the past when the retirement age has been increased it provided an immediate and substantial financial relief. The math checks out that if we did it again it would help the program.
So we should do it?
Well, that is where it gets complicated and there are some warnings to that.
There are a couple assumptions baked in to the increased age argument. The first is that everyone “retires” by choice and so they are taking advantage and straining the system unnecessarily. This is largely not the case. A second idea is that everyone is able bodied and can work, so they should. Again, not exactly reality for most that are approaching retirement age. Plus, job availability often complicates this despite desire to work.
Many people require the power of social insurance programs well before age 70 and a reduction that comes via an age change, could reduce the benefits for that may need it.
Age change, like in Denmark, impacts the young far more then the old. Denmark points to 2040 and that year is significant for me and the work around The Future Poor. That year marks the end of the 30 year period I call The Death of Retirement era where we return back to where retirement began in 1890. It will return back to the non-optional era as the system reaches its ending.
For more on this I have included the original article that got my attention about Denmark.
https://apple.news/AB-QWcvSJS-q84nEuClapyg
As always, if you come across a financially related article you’d like to send my way please do!
Best place to send them is to me.
More next time!
Jonathan