Jorge Paulo Lemann, the Brazilian-born billionaire said, “It’s a horror that everybody … retires at 60 and thinks it’s all right.” Though speaking specifically of those in Switzerland, Lemann is one we would suppose, that is shaming people for their lack of wiliness to work. Of course, there is a hidden agenda in all this. Many political elites can see that people are in fact living longer and in order to keep the social contract in place will require people to retire later in order to fund it and keep it at its current rate. The question is, is this practical? Can people really work into the 60s and 70s? News Forecasters asks what is the future of retirement age and pension funding?
Lemann is the world’s 34th richest person, with a net worth of $25.6 billion, according to the Bloomberg Billionaires Index. He says he has no lack of energy because there’s still much to be done. And daily exercises, which he calls “sacred,” help keep him sharp. A former pro tennis player in his youth, Lemann still enjoys the sport. And when his wife pointed out that he sometimes sleeps during meetings, he added, “I also sleep very well.” A nice gig, to be able to sleep through your work. Another billionaire telling the little people how to live and showing just how easy it is.
The World Health Organization reports that life expectancy has increased by 5 years in recent years. The survival for women and men shows similar trends. Women in Japan and men in Switzerland can expect to live the longest: about 87 years and 81 years, respectively. The question is can they practically work with these additional years in the workforce? Most likely not unless you do something actively to ensure that you can work these extra 5 years – this would include good exercise, good diets, and abstention from bad lifestyles (i.e. smoking). If you cannot do this, life could get difficult – something previous generations didn’t have to worry about.
Retirement age and political mismanagement, has caused unfunded pension liabilities to grow. The average US state pension plan is funded at a paltry 35%, as unfunded liabilities of state-administered pension plans total nearly $6 trillion—equal to $18,300 of unfunded pension liabilities for every US resident—according to a report from the American Legislative Exchange Council (ALEC). The latest report on Social Security’s solvency says the trust fund is estimated to be depleted in 2034. That’s only 15 years away. The only way to stop this is by raising taxes and/or raising retirement ages. Here is a current list of a few countries and their retirement ages. Not a pretty picture.
News Forecasters believes that a pension crisis is looming. This is due to the combination of people living longer, pension mismanagement, and the fact that there will be less young people to pay into the pensions to support current pensioners benefits – hence a push for immigration (assuming, of course, the new immigrants can provide enough tax revenue). The push for increased retirement age will be limited however, the reality is that many workers just won’t be able to work beyond 67. Future retirees will need to pay more retirement taxes and manage their retirement health, in order to have a successful retirement. Many will not and a new underclass old people will be created. More for politicians to play political football with.