Don’t Penalize Workers for Retiring Later
The last decade has seen most countries in the rich world raise the retirement age in order to improve the sustainability of their pension systems at a time when people are living longer, healthier lives. The policy is moving in the right direction, but it has one key flaw — current policies are too rigid.
Retirement should not be a one-size-fits-all system where those who work longer or retire earlier are penalized. Provided they get it right, governments and citizens have much to gain from a more flexible pension system than exists in most countries today.
According to a study published last week from the Organization for Economic Cooperation and Development, the average retirement age for men across OECD member states is set to go up to 65.8 years from 64.3 years today. This follows a gradual increase in the recent past: Over the last decade and a half, the average age at which workers left the labor market has gone up by two years. That said, there is a great deal of variation, from Korean men who leave the labor market, on average, at 72, to French men, who retire at 60.
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