Fashion trends historically start in Europe and make their way to the US…are retirement trends the next trend to jump across the pond? The list of countries that are examining raising the retirement age or ones that have already raised continues to grow. Spain recently announced that it has approved a plan to raise the retirement age to keep funding its pensions despite an aging population by raising the age from 65 to 67. Greece has been in the press lately with all of its financial problems and recently said it wanted to increase the average retirement age from 61 to 63 by 2015 but that has resulted in massive strikes by workers in the country. The United Kingdom has discussed eliminating the mandatory retirement age or increasing it stating that it could be a big boost to its economy.
Under current US federal law for Social Security benefits, for people born in 1943 through 1954, the full retirement age is 66. The full retirement age will increase gradually each year until it reaches age 67 for people born in 1960 or later. How soon will this go to 68, 69, 70? America is not immune to the global financial issues and with the federal deficit growing, realistic choices are to raise taxes and/or prolong distribution of Social Security benefits. Former Federal Reserve Chairman Paul Volcker and economic adviser to President Barack Obama recently advocated gradually raising the retirement age to reduce the stress on the Social Security system from the retiring Baby Boom demographic bulge. In an interview on Bloomberg Television on Friday, February 19th, Volcker stated that the the Social Security program should raise the retirement age by maybe a year or so and that the increase should be implemented on a gradual basis over 15 to 20 years.
Let’s see how fast this issue bubbles up in the current state of US politics…it will be a bitter pill to swallow for the American public.