back to article Retirement age must move as life expectancy grows, says WEF

The ratio of people in the workforce to those in retirement will fall from 8:1 to 4:1 by 2050 if retirement ages do not change, and the global economy will not be able to bear the burden, the World Economic Forum (WEF) has said Life expectancy has been growing globally by an average of one year every five years since the …

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Re: Earth to the WEF ...

Hold on, if you've got 20 years of redundancy, you have been working at least 20 years, so you should have bought a place back 20 years ago when prices were still sane, not leaving it until now.

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Re: Earth to the WEF ...

Yeabbut, based on my personal figures, property tax, maintaince, repairs, utilities, etc. is about 25% of (all_that + mortgage). Getting rid of the mortgage gets rid of 75% of roof_over_head-related expenses.

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Re: Earth to the WEF ...

Not really. Property taxes are covered by the mortgage since it's still the bank that owns the house, not you. Once you're free and clear, the burden falls to you.

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Re: Earth to the WEF ...

"Property taxes are covered by the mortgage since it's still the bank that owns the house, not you."

Where you live, maybe.

Certainly not in the UK. Property taxes are local taxation and part of the funding for local services such as emptying the bins on reduced cycles, closing the libraries and building big shiny sports centres and paying for the Tour de France so that the council leaders can get there photos in the local paper.

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Anonymous Coward

Re: Earth to the WEF ...

"That's the price you pay for not actually buying your house when you can afford it rather than spending those bills on booze."

USA here: we own our house clear, also some income property. EVEN ON MEDICARE (the USA old folks' supposed single payer healthcare) supplemental insurance premiums and co-pays for cancer treatment (in remission, and hope to stay that way) require more than a 40 hour a week minimum wage would pay. That does not factor in little incidentals like food, utilities, transportation.

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Re: Earth to the WEF ...

Not really. Property taxes are covered by the mortgage since it's still the bank that owns the house, not you. Once you're free and clear, the burden falls to you.

Not in the US! They are ADDED TO the mortgage, unless you have a whopping lot of equity and request that you pay them separately.

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Anonymous Coward

Bugger *that*

I'm going to retire at 55 on a (not very good) occupational pension. After having friends, family, and ex workers die in their early sixties or earlier I'm not going to work until 68.

I'd rather have little money and top it up with other sources of income than carry on full time work.

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Re: Bugger *that*

I know a former headmaster who found out that the average age of death for headteachers in his bit of the UK was 66. Retiring as soon as possible became a top priority.

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Re: Bugger *that*

I feel much the same way, and plan to switch to shorter working hours at some point, but to carry on working as long as I feel able. I rather think that in many cases, work becomes a person's life, and without work they simply have not got very much to give their life structure. So, carry on working for as long as you can, but simply reduce the hours and pressure as much as possible.

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Re: Bugger *that*

I'll never forget a study about GP longevity a number of years back. Retire at age 60 - average age of death, think it was 70+.

Golden handshakes were going around at that time. Retire at age 65, average age of death : 66.

No point in money if you're not around to spend it.

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Re: Bugger *that*

No point in money if you're not around to spend it.

I dunno, I come from a relatively poor family and worked up to a decent wage, I want to leave my kids as much as I can so they have an easier life.

If my kids are loaded though, I'm retiring early and moving into their spare room, they can wipe my shitty arse for a change!

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Re: Bugger *that*

"switch to shorter working hours at some point"

I'd do that now given the choice , but im not getting what im worth as it is. If i was i'd work 1/3rd less hours

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Re: Bugger *that*

I rather think that in many cases, work becomes a person's life, and without work they simply have not got very much to give their life structure.

I agree and I find that extremely sad. Assuming they have enough for a comfortable life, given the freedom to do anything they could choose to do, that they can't find anything to keep themselves fulfilled, have become institutionalised wage slaves.

I can't wait to get out but I know plenty who are dreading it, don't see what the point of life will be after retirement. I feel we've really let them down.

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Re: Bugger *that*

With you there. Self employment forced me to buy private pensions and I see no reason not to start collecting them early. Recent changes mean I now will get a state pension for paying NIC for so many decades but that will just be a bonus a dozen years or more after I retire.

Our parents all retired by 55 and they're heading for record ages for both families, instead of dying in their 60's. Our siblings are all planning to go early on their company pensions. They can try forcing us back to work but they can't starve us into it.

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Taxing Corporations and the Wealthy like they were in the 1970s would go along toward solving a lot of debt issues, but they were able to buy most of the World's Governments.

Globalization is another tool in keeping pay scales held down in developed countries. It could be otherwise but that would be less profitable.

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That worked so well in the 70's, taxing people that left the country and reach of HMRC.

I look forward to post-brexit tax haven England, the only one that charges higher corporate tax.

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It's worse than we thought.

https://www.theguardian.com/global-development-professionals-network/2016/apr/08/global-inequality-may-be-much-worse-than-we-think

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Portfolio careers?

I remember someone referring to the idea of 'portfolio' careers. In the 'good old days' before the EU and antibiotics, most people stuck to the same job all their lives (well, a seven year apprenticeship tended to discourage re-training). They also then died at a sensible age.

Now it's different - the world and society now changes very fast. Many people will have working lives of 60+ years, and we need to handle that by letting people have several careers during those years. As individuals we need to look to ways to feed ourselves for longer, but when we're 80 do we need to keep buying expensive consumer durables? To be honest, we can all live with rather less in the way of shiney-shiney. Many people already have several jobs (just to make ends meet) but there's nothing fundamentally wrong with older people having two or three easier lower-paid part-time jobs, just so long as they are able to do them and happy and earn enough for a reasonable standard of living. A lot of this comes down to changing peoples' expectations.

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Headmaster

@ Pen-y-gors Re:".....by letting people have several careers during those years...."

Indeed Pen-y-gors but this comes back to my original point. How will people have such careers if employers are not interested in anyone past a certain age? The only way we can tackle this (and it is a crucial issue for society) is to outlaw age discrimination explicitly. We cannot cope with these challenges if employers continue with their foul attitudes towards older workers. That they are shooting themselves and society in the foot at one and the same time is something that they appear to be blissfully ignorant of. We cannot continue in this way if we are going to tackle these issues. The ever increasing numbers of older workers who could work, if given the chance, who society cannot in the long term support on pensions at the age concerned present an economic challenge that we have to tackle. The reality is that we have to take the employers warmly by the throat and make it clear that they do not have a choice. Otherwise the options are terrifying for both society itself and anyone over a "certain age".

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Re: Portfolio careers?

What is meant by phrases such as; "letting people have several careers"; " but when we're 80 do we need to keep buying expensive consumer durables?"; "To be honest, we can all live with rather less in the way of shiney-shiney".

One day a long time ago we dissolved all political ties with another. Then we mutually agreed "that all men are created equal" and that we need to institute a government to defend our unalienable rights and that government will get its "just powers from the consent of the governed".

Today you are saying someone has the power to let me or you work and let me or you buy something and let me or you live the way we choose. Did we amend our founding document "The unanimous Declaration of the thirteen united States of America"? When did that happen?

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Re: Portfolio careers?

"Many people will have working lives of 60+ years, and we need to handle that by letting people have several careers during those years."

I'm not sure about 60+ but in the course of 40+ I changed career midway through. I doubt I could have stood the first one much longer than I did. I'm also not sure how much longer I'd have been able to stand the second one. In my case stuff I learned in a peripheral way helped start the second career but I don't see how I could have moved on to a third anything like as easily.

"Letting" people have several careers would actually involve being prepared, as a society, to retrain them. In practical terms we've somehow got ourselves into a situation where we're not even financing training for a first career.

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Re: @ Pen-y-gors .....by letting people have several careers during those years...."

"The reality is that we have to take the employers warmly by the throat and make it clear that they do not have a choice."

One part of this may well be a demographic change. With smaller family sizes employers are going to find there are fewer young recruits and will have to look at recruiting and/or retaining older staff.

Another will be that as the average age of the population increases so will the age of those making such decisions; things will look different from an older viewpoint. Experience will come to be something to be valued.

It would help if management skills were increased. Less experienced workers may be impressed by managements "motivational" attempts. After a few times round the block it becomes seen as an insult to the intelligence, the victims react accordingly and management wants to replace them with someone who'll be seen as a better team player or whatever when in fact it's they, the management, who need to learn to do better.

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Unhappy

Pension age vs retirement age

Currently, I will be eligible for state pension at age 67 (only 20 more years).

I should be able to start properly saving for retirement at about age 65. (that should be when most debts/mortgage/etc are cleared)

I will probably need to work until I am in my mid to late 70's (maybe even early 80's) to be able to afford to retire with any degree of comfort.

Just as well that most of my family tend to live well into their 80's/90's before finally dropping dead - hopefully I will have a couple of years to enjoy retirement.

Of course this could all become moot if one of the nutters currently in charge of a country with Nuclear weapons decides they really want to play with their shiny toys.........................

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Anonymous Coward

10 trillion pounds owed to state pensioners, civil service pensioners, current or future just for PAST payments.

There are no assets.

The WEF needs to be honest. It's not people living older, that's just blaming the victims.

It's the socialist welfare state that spent the money and didn't invest it. It's a ponzi, and ponzi's collapse.

The WEF are just blaming the victims for the scam committed by governments.

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And your solution is?

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Wow

@AC.

This is one of the first times I've seen the reality brought up by someone else. The whole NI scheme was largely a Ponzi. Pay today and we'll give you something tomorrow. Some was spent immediately on things related to NI like the NHS, but the vast majority was spent on other things. The idea that tomorrows workers will pay pensions for todays workers is almost perfectly the definition of Ponzi. As average lifespans extend, it was always going to get into problems. When instigated, the average person might have 5 years in retirement (may died before retirement), but now you can look forward to something like 20 years (at least) in retirement. This was obvious as soon as life expectencies started going up. But, the politicians buried their heads in the sand and ignored it. So, left retirement ages the same for decades. In reality, if the retirement age was increased gradually from say 1970 onwards, this wouldn't have been a problem.

The above would also have solved the issue of expectation. People now expect 20 years of retirement, but it simply isn't financially practical. But, having got this expectation are not willing to give it up. Of course, some politicians are more than willing to pretend the issue doesn't exist and pander to these peoples desires, which will work in the short term, but will just make the problem worse in the medium term. People need to wake up, understand the issue and realise that no matter how much they might want and expect something, it doesn't mean they can actually have it.

Alternatively, save an awful lot more into your pension than the current average.

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One solution is fairly obvious: do not elect politicians who promise to borrow yet more money to provide bribes now, since all they are doing is hastening the collapse of the Ponzi scheme.

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@Dr Dan.

Absolutely. All this borrowing for today, pay back tomorrow (more likely never) just makes it worse. PFI......bad etc.etc. Even some seasoned politicians don't seem to understand how government borrowing works and that even if interest rates are low now, it doesn't mean they always will be and of course, the more you borrow, the higher the risk, hence the higher the rate.....

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Re: Wow

"The whole NI scheme was largely a Ponzi"

Yup, there's no 'Insurance' element to it at all.

I recently checked my estimated state pension,... it's maxxed out, I can't get any more out of it, despite how much more I pay in. That sucks, as I have another 19 years of work ahead of me, potentially.

My pension from a previous job is increasing in value nicely however, and I'm no longer paying into it. I feel sorry for anyone who will be solely reliant on a state pension.

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Re: Wow

That's the state pension scheme problem - there isn't one in any financial terms as it's as described - a "hope we can pay for it later" investment scheme. On the other hand, company pension schemes where companies are able to raid these assets and use the funds for their own purposes, often short term bailouts to ensure that dividends and bonuses are paid, not to invest them responsibly are a growing problem. The protections on these non-state pension schemes have been gradually eroded by politicians who have more a passing interest in the organisations who wanted to "unlock the value" (i.e. take the money from) the pension schemes.

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Re: Wow

@ Mad Mike

Alternatively, save an awful lot more into your pension than the current average.

Even that might not help much. I suppose I am lucky; the bulk of my retirement income comes from a Defined Benefit (contributory) pension, but that was closed some years ago with new "entrants" being on Defined Contribution.

One factor in the demise of D/B schemes that is rarely mentioned is Gordon Bown's tax raid on the dividend income that pension schemes receive on behalf of their one - time contributors, now beneficiaries. It's little wonder that D/B schemes struggled to remain afloat with those that haven't been closed developing greater and greater black holes in their accounts. As governments can become as hooked on other peoples' money as anyone else there has been no move that I am aware of to ditch what to me has always been an unfair penalty on retirees.

D/C schemes do not really allow much by way of financial planning; how can a soon - to - be - a - retiree plan ahead when there can be no clear picture of what the retirement income is going to be?

Politicians (it isn't just governments) bleat about people not planning sufficiently for their retirement and then make it as bloody difficult as they can to make any such planning even halfway effective.

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Re: Wow

@Commswonk

Very true. Gordon Browns raid hit pensions of all types, but especially those with higher liabilities such as defined benefit. Short term moneymaking causing massive black holes in the future.

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Anonymous Coward

what's really interesting:

to get yearly Cost of Living adjustments, and paid benefits for the rest of one's life, no matter how long-as well as health insurance benefits, available from age 18 without ever having to invest any time in employment at all, is supposedly NOT the problem.

But working and providing services, often funded with a portion of your wages, for a minimum of 25 years, with no cost of living adjustments (hence "fixed income") and a limited pool that can run out if one isn't careful or lives "too long", somehow IS the problem.

Apparently the REAL problem is keeping the "privileged" working longer to support the "underprivileged" at identical or even *greater* lifestyle levels.

Hell, I *already* share my apartment building with identical "quality of living" with a number of perpetual "clients", and have seen my share of those move to actually renting nice houses with lawns and garages that I simply cannot afford on my actual 50 hour workweek. It doesn't help that rents are stabilized by Section 8 rather than what most can afford to pay- people can't afford to rent your home, Section 8 is happy to swoop in and pay "market rate" because their "client" list is backed up for *years*.

Working is a Sucker's Game nowadays. And this Foundation wants the suckers to work longer.

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Anonymous Coward

so how is it

that borrowing to "bribe" people who will be receiving individual benefits for *greater* than 20 years who contributed nothing net, is not a problem?

Because if it's "bribing" the workers who actually send out and supply those benefits in the first place, who provide an actual societal contribution as first responders or support personnel by multiplying their retirement contribution, then what do you call it when you're giving that to people who receive the same or greater "bribe" but don't even contribute anything in to multiply?

One does something, gets 20 years maybe of fixed income safety net. The other, "contributes" by providing surplus population, or obeying the laws and not victimizing others to "get by", gets cost of living increases, and does so from the day they're "emancipated" and has NO LIMIT to most benefits (housing, food, health insurance, and most cash aid programs have no "clock" or end date, and those with the '5 year limit' can often be reset simply by dropping that one program and waiting awhile or moving to another county).

which is the "bribe" again? or are we using "bribe" to differentiate between that and "protection" money?

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Sorry AC: The only people who can pay for pensions are the ones working. Funded pensions vs. PAYG is just accounting.

IOW, if there are no-one working there are no assets.

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Re: Wow

I don't know when it happend or who is to blame, but "they" should never have allowed a company's pension scheme to be predicated on the continuing existance of the company by being invested in the company itself. All and any pension scheme must be invested in a spread of unrelated investments.

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"And your solution is?"

Dunno, but properly defining the problem is a prerequisite to solving it.

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@ Dr Dan Holdsworth

Hastening the collapse of the Ponzi scheme might actually be what's needed in the long run. That or the next, overdue, 'flu pandemic. Neither will be much fun.

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Re: Wow

"One factor in the demise of D/B schemes that is rarely mentioned is Gordon Bown's tax raid on the dividend income"

True. It was a tax on the future and that future is now.

I felt at the time - and still do - that pension schemes should have started issuing double projections: this is what your pension plan is actually likely to bring you and this is what it would have been likely to bring you without the tax. The consequences would have become widely understood very quickly and he'd have been forced to think again.

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Anonymous Coward

"Someone who retires today in Japan at the age of 60 can expect to have someone draw their pension for over 45 years"

There, now that's a little more like the truth as nobody ever checks that your oba-chan (granny) is still alive when you take her pension book down to the post office every week. Actually, given the sheer unhealthiness of the typical Japanese diet (high salt, high sugar, high iodine, high carb, low fibre, too many pickled/fermented foods plus lots of raw things that really would be safer cooked), the very high smoking rates and of course the inhumane work environment, it's a wonder any of them ever get to 60.

But anyway, they are already reforming their state pension system so it has a sort of "one-and-a-half lock" - pensions will rise and also fall in step with average wages, except that if wages fall during a time of price inflation, pensions will be held level.

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I dunno, I have gone hiking in Japan and some old baba's and oji's in 5 layers of clothing easily overtook me in 35C and 90% humidity. Japanese pensioners are made out of harder stuff than most give them credit for, but yeah the "granny is 117 years old, no you can't see her, she's sleeping, what do you mean there's a funny smell coming from her room?" is rather too common for my liking.

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I know a guy around 70 who constructs paths up the mountain at the back of my house in Japan.

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Unhappy

It's insane

Every economic and ecological factor says we need to have less people around - i.e. have less children.

But the short-term problem of how to pay for the enormous number of old people pushes against that: to satisfy that need, we need to have _more_ children - or import young people. Who will, in turn, grow (very) old and need looking after.

I wish anyone in charge was engaged in any kind of long-term thinking.

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Re: It's insane

i.e. have less children.

I did that! do i get any thanks? no

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Joke

Re: It's insane

Of course the real story here is that it should be fewer children.

Oh the insanity

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Re: It's insane

so instead we advocate for support of more young people simply because they had children they can't support without help?

you say we need less old people so the solution is to support more young people. Problem is, the old people aren't making more old people. The societal debt of welfare programs that primarily support the breeding population, with a constant increase of *multigenerational* welfare recipients, is the real short term failure.

You could both cut the population and breeding rates AND support the old people with the removal of (regardless of the pretense that it's anything but) government child support. "think of the children" is a constant increase of debt load. Old people, that debt load decreases over time.

Problem is, except in cases of mental illness, older people with actual life experience are harder to lie to. they don't march in protests over stuff they've already marched for and found was a big lie the first time. So politically, they're not "useful" so we wind up the "pensioners are the problem!" rhetoric.

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Re: It's insane

Every time I suggest people have a sane lifestyle, & 2 or 3 children per couple (helps to avoid wars also [because governments can plan longer-term]) I get called a Nazi by the baboons who demand the right to ten abortions & ten children..

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Re: It's insane

"I wish anyone in charge was engaged in any kind of long-term thinking."

Any kind of thinking would be a start.

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Re: It's insane

"Of course the real story here is that it should be fewer children."

No, less would be fine. Eating less, needing smaller clothes, smaller homes, smaller cars.

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Yes it is true that people live longer and therefore a bigger proportion of people will be living at one moment ith age above retirement age, therefore less workers will support more pensioners.

But I have feeling that they always forget to take into account the rise in productivity of people. There are huge gains in productivity, and therefore less people are needed to provide things for everybody.

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