Americans to raise retirement age to 70

Click to follow
The Independent Online
KEEP WORKING: that, it seems, is the message for America's baby- boomer generation. Another five years of hard labour lies ahead of most Americans if a new retirement plan issued yesterday is accepted, writes Andrew Marshall.

The plan is an attempt to address concern about the shortfalls in America's social security system, which on current projections will not be able to pay out all the money necessary as more people retire than come into the system. It would raise the retirement age to 70 by 2029 - it was already due to rise to 67 over the next few decades - and raise the early retirement age to 65 from 62 by 2017.

The plan is part of the revolution in pension systems that is sweeping the world as nations try to keep up with the bulge in population caused by the post-war baby boom, rising costs and static or dwindling revenues.

It was drawn up by the National Commission on Reirement Policy, a bipartisan group of Congressmen, businessmen and academics, working with the Washington- based Centre for Strategic and International Studies. The plan touches one of the hottest topics in America: how to ensure people get what they need after they retire without bankrupting the US. Retirees are an influential pressure group in the US.

The core idea is to introduce a measure of private investment for the first time into the American social security system. At the moment, 12.4 per cent of a worker's salary is deducted from wages for social security, and matched by the employer. Under the new plan, 2 percentage points of that could be invested in stocks or bonds. The plan would keep the social security system solvent for at least 75 years, the panel estimated.