The recent debates on retirement policy are anything but productive. The main points revolve around the rising debt and health care costs, as well as increasing the retirement age. While these concerns are important, retirement policy in the United States (and in the world) needs another look. More and more people are living to the age of 100. As a result, years of retirement can equal years of work, which poses a problem for seniors who might outlive their retirement savings. Many seniors rely on government programs such as Social Security and Medicare, but we need to think of additional methods that will help alleviate the burden of these programs. We need to examine about how we age and how we work.
The number of Americans age 65 or older who reported employment rose 64 percent between January 2003 and January 2013, and more than 7.4 million Americans age 65 or older were still in or had returned to the workforce last January. Obviously, older Americans are working longer, which can affect their quality of life. At the same, there are companies that will not hire older people. This is a real problem of ageism, one that must be tackled if we want to go ahead with the idea of increasing the retirement age. It has been suggested that Congress should provide tax incentives to keep older Americans on the payroll. Then, Congress should make it easier for these companies to shift some of the healthcare cost to Medicare.
In the United States, the normal retirement age for Social Security has gradually increased from age 65 to 67. Ongoing debate on increasing the retirement age to receive unreduced benefits continues to affect our retirement policy agenda. We are largely governed by an industrial-era mindset that assumes most people will do physical labor for most of their career, retire at age 65 and then die at seventy. At the same time, we are also governed by a Depression-era mindset that states that people ought to retire at age 65 (or younger) to clear the way for more jobs for younger Americans. This assumes that job creation is a zero-sum game, and that younger people bring the same skills to a job that older people bring.
The reality is that most Americans don’t have physical labor-related jobs and most don’t die at age seventy. Moreover, older Americans bring different assets to the job (including wisdom, temperament, and history), than younger employees, who bring energy, ambition, and fresh ideas to the workplace. Maintaining a high quality of life for older Americans is crucial and it would be a travesty to continually increase the retirement age, forcing some older Americans to continue working in order to receive benefits. We need to adapt our assumptions to the new realities and allow older Americans to retire at the age they choose with their benefits. Congress needs to establish a minimum retirement age.
Addressing these issues will take a combination of difficult policy and social changes. Our nation’s economic growth depends on keeping older Americans productive and active in society.