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What is the Age of Retirement?

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  • Written By: Tricia Ellis-Christensen
  • Edited By: O. Wallace
  • Last Modified Date: 30 November 2016
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There are several ways in which the age of retirement may be defined. It can be age at which people may begin to collect state pensions or monies from other retirement accounts. It can also be simply the age at which people stop working, whether or not they receive any form of retirement money. In the latter example, age of retirement could vary significantly, but in the former, most countries have specific rules about when people are considered eligible for retirement.

In countries like the US people may reach early age of retirement in their early 60s. The specific year at which a person can retire and collect state funds is often based on year of birth. While normal age of retirement was once thought to be 65 years old, people may now often need to wait until they are 67 to be fully retired. With earlier retirement, social security benefits are reduced by a certain percentage. Another interesting fact is that people who retire early and continue to work may have part of their retirement reduced in early years. Normally if people have reached the full age of retirement, they can continue to work and collect the full retirement amount; this may vary in policy by country.

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The reason the issue of working and retirement is so important is because many people with inadequate savings do not find that they can live comfortably on any form of pension/social security. Especially in the US those who invested or who earned pensions at big companies may have lost all or part of that money with economic downturns or things like company bankruptcies. This can mean age of retirement may refer to collecting government monies, but not to getting anything else. For this reason, many people who reach the age of retirement often feel they must continue to work, and there are some economists who believe that the idea of retirement without working will be short-lived and less likely for people in future generations.

One thing many economists advise is to begin saving and prudently investing funds to cover the shortfalls of any pension fund or social security income. Most suggest these investments should begin when people are still in their twenties. Diversifying investments is recommended to minimize risk. Given strong investment profiles, people may then be able to determine what age of retirement is appropriate. Yet even investors are subject to losses, as was clearly evidenced by the stock market rapid decline in 2008. This economic disaster put off retirement for many investors.

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lluviaporos
Post 3

@pleonasm - It's compounded by the breakdown of the family unit across the board. If you make it so that the next generation don't live with their parents after they reach adulthood, you potentially raise a generation who don't feel responsible for the one that came before.

If it was a given that people past the age of retirement were going to live with their children, there wouldn't be an issue. They wouldn't require nearly as many resources or special infrastructure, because they would be part of the family unit and the unit would help them get around and survive in comfort.

It's because people live so long now and are expected to live independently of the extended family, that you have problems. I think the solution is going to be a return to traditional family units, where the grandparents live with everyone else rather than being put somewhere else.

pleonasm
Post 2

@Mor - Japan in particular has realized this is a serious issue, although their difficult is compounded by the fact that they allow very little immigration, so their population is dropping faster than most. I've heard all kinds of things about how they are trying to solve the problems coming up, from developing robots that will work in old folks homes, to encouraging young people to procreate with tax breaks for new parents.

I'm not sure if they have changed retirement pensions or anything like that, but unfortunately, that will probably happen too. Countries simply won't be able to afford to support their older population.

Mor
Post 1

This is going to become more and more controversial as the decades move on and the wealthier countries begin to feel the pinch of being so top-heavy in terms of their population. When you've got a lot of people at the age of retirement and not enough younger people to replace them then it can be tempting to try and shift the retirement age in order to put off the inevitable.

It's definitely a good thing in the long run that developed countries seem to taper off their birthrate, because it shows that people aren't necessarily doomed to breed themselves out of existence. But in the short term, it's not going to be fun for anyone when all the retirement homes are full and there isn't anyone around to care for all those people.

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