Thinking of retiring at 65? Think again

I’m 51 years old at the moment, and I think about retirement often the older I get. From my perspective, I don’t want to retire because I love what I do, so why would I want to stop? That’s my view, but quite a few people that I talk to are already retired or are just holding in there waiting for that magic age. Certainly, the older you get, it becomes a very serious topic, so I thought I would explore the history and implications of the retirement age. This is just the start; there is so much more that I will be unpacking on this subject, but we need to discover the history to understand how we got here in the first place.

The history of the retirement age

The retirement age of 65 is not a natural or universal phenomenon. It was first introduced in Germany in 1889 by Chancellor Otto von Bismarck, who wanted to provide pensions for elderly and disabled workers. At the time, the average life expectancy in Germany was just over 41 years, so most people did not live long enough to claim their pensions. The idea of retiring at 65 spread to other countries in the following decades. One of the countries that adopted the retirement age of 65 was the United States, which enacted the Social Security Act in 1935. This act established a federal system of old-age benefits for workers and their dependents, funded by payroll taxes. The act set the retirement age at 65, which was considered to be the age of economic dependency at the time. When this act was passed, the average life expectancy of an American was 60.7 years. So, when these retirement ages were set, not many people were reaching them. But things have changed, have they not? Let’s look at how dramatically different things are now, pretty much 100 years later…

The changing demographics of the workforce

Today, the retirement age of 65 is likely outdated and unsustainable. According to the United Nations Population Division, global life expectancy has improved from 46.5 years in 1950 to 71.7 years in 2022 and is expected to improve to 77.3 by 2050. According to the CDC National Centre for Health Statistics report, life expectancy for the U.S. population in 2022 was 77.5 years, an increase of 1.1 years from 2021. This means that people live longer and healthier lives and can work beyond the traditional retirement age. However, this also poses challenges for pension systems, which have to support a growing number of retirees. Looking ahead, the World Bank defines the old-age dependency ratio as the ratio of people aged 65 and over to people aged 15 to 64. According to the United Nations Department of Economic and Social Affairs report “World Population Ageing 2019”, in 2019, this ratio was 16, meaning that for every 100 workers, there were 16 retirees. By 2050, this ratio is expected to rise to 28, meaning that for every 100 workers, there will be 28 retirees. This will strain the pension funds unless the retirement age is increased. Can you imagine the fallout of the government in your country raising the retirement age or, even more dramatically, capping the age for retirement benefits? Could happen. We have already seen the protests around raising the retirement age in France.

The future of the retirement age

There is no one-size-fits-all solution for the retirement age. Different countries have different economic, social, and cultural factors that influence their decisions. Some countries, such as France and Greece, have resisted raising the retirement age, while others, such as Norway and Sweden, have introduced flexible and individualized retirement schemes.Some experts suggest linking the retirement age to life expectancy so that people can retire after a certain number of years in the workforce, regardless of their chronological age. Others argue that the retirement age should be abolished altogether and that people should be free to choose when and how they want to retire based on their personal and professional preferences. Whatever the future of the retirement age may be, it is clear that 65 is not the magic number anymore. People are living longer and working longer, so they must plan their retirement accordingly. When deciding when to retire, they also need to consider their physical and mental health, their financial security, the changing economy, and their social and personal fulfillment. As the famous quote attributed to George Burns goes, "Retirement at 65 is ridiculous. When I was 65, I still had pimples." My last take on this is that you must realize that you will likely live far longer than the retirement age. Unless you have a mega fortune stashed away, will you survive? Maybe 65 should be the age of reinvention, not retirement? I hope this article got you thinking. Stay tuned for further articles on the subject, where I will explore lessons learned from retirees, medical breakthroughs that could seriously impact life expectancy, an economist's assessment of the impacts we hadn’t necessarily considered, and much more…

I also had to just include this comment from Nick Wonfor , who proof-read this article, “There is no mention of winning the lottery and packing it all in tomorrow, though. I'm disappointed that this option and how to achieve it was not discussed.” I’m Desmond Kurz, also known as Des Vader. Expect more as I share my insights and thoughts from more than 30 years of business experience. If you would kindly follow me on LinkedIn and my YouTube channel, I shall endeavour not to disappoint! What's your take on retiring at 65? Let us know. Email mail@prioritynews.net.

Desmond Kurz - Gadsden County News Service

Thinking of retiring at 65? Think again

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Thinking of retiring at 65? Think again

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The Creek Praise Dancers Inspire Worship Through Dance

WoodFest held in Havana

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