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Denmark passed to increase her retirement age up to 70 – making him the highest retirement age in Europe.
However, the US can be difficult Follow it.
The new change in Denmark will apply to a public pension from 2040. From 2006, the country has been adapting its retirement age to reflect changes in life expectancy.
The USA technically does not have the official retirement age. At the age of 65, people qualify for Medicare. Aged 66 to 67, depending on the date of birth, the unit qualifies Full of benefits from social insurance based on earning records.
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However, people who are waiting for the age of 70 to apply for retirement benefits in the field of social security to obtain the greatest payment – an increase of 8% for each year Full retirement age. (The full retirement age is that beneficiaries qualify up to 100% of benefits they earned on the basis of their documentation.)
However, few people are waiting for the age of 70 to apply for benefits. While over 90% of people would benefit from social insurance delayed by this age, only about 10% actually, in accordance with 2023 paper from the National Bureau of Economic Research.
Although at the age of 70 it is not an official retirement age in the US, it is a threshold based on the definition of economists – a age at which no benefits can be charged, according to Teresa Ghilarducci, a work economist and a professor at the new Social Research School.
“There were 70 in the United States for decades and we had the highest retirement age for years than any other country,” said Ghilarducci.
Retirement age in the USA for a debate
However, there are efforts to officially raise the US retirement age higher.
In 1983, Congress provisions adopted A gradual increase in the full retirement age for social insurance From 65 to 67. This change is still withdrawn, and people born in 1960, and later are subject to a higher 67 retirement age.
In December, An amendment To increase the full retirement age to 70 years, he was introduced by Senator Rand Paul, R-Ky. During efforts at the last minute aimed at increasing the provisions that increased social security benefits for some public pensioners.
Account, the Act on justice in the field of social securityHe was voted for the right. However, the proposal to increase the retirement age has been limited.
Paul called for raising the retirement age by three months a year until he was reached 70 to reflect the current expectations of life. The change would cause almost $ 400 billion savings for the program, while the Act on justice on social insurance added $ 200 billion in 10 years to the program within 10 years.
Other Republican proposals They also called to raise the retirement age.
Social security administration is dripped Dates of exhaustion In the case of trust funds, which consists in helping in paying benefits. To help solve this problem, legislators may consider raising taxes, limiting benefits or combining both. Increasing the retirement age is effectively reduced benefits.
Like the changes introduced in 1983, an increase in retirement age can be on the menu.
The bottom movement “sends a signal” to make it work longer
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Experts say that moving Denmark to raise the retirement age to 70 is not a surprise.
In 2023, tests Published by the Danish Center for Social Science Research, it was found that increasing good health and educational resources for 60-70-year-olds, along with a greater demand for older employees, may indicate an increase in retirement age in the future.
In 2025, the inhabitants of Denmark can retire with public pensions when they are 67 years old. Gradually, it will increase to 70 from 2040.
“It simply means that today younger people will have to work longer before they are able to retire,” said Jesper Rangvid, a finance professor at Copenhagen Business School and co-director of his retirement research center.
According to Rangvid, this retirement age affects all entitled to basic retirement income. However, people with private pension savings can retire earlier.
“Nothing prevents you from retiring if you have funds and funds to do it,” said Rangvid.
Denmark offers options for early retirement, including early retirement. However, raising the retirement age passes the message, said Rangvid.
“He sends a signal that this is how they would like the position that you should work longer,” Rangvid said.
An increase in retirement age in the USA may be problematic
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Retirement experts say that raising the retirement age in the US may not be the same solution for the population he has in Denmark.
Denmark has a much more “equal society” when it comes to income, wealth, education and the expected life expectancy compared to the United States, said Alicia Munnell, a senior advisor at the Center for Retirement Research at Boston College.
Munnell said that in the United States government data show a clear difference between the expectations of life for people at the bottom and the highest income.
“When you have such a big, big difference, every increase in retirement age would be stupid,” said Munnell. “This would be extremely harmful to people downstairs who already receive benefits for a shorter time.”
According to Andrew Biggs, a senior member of the American Enterprise Enterprise Institute, a policy regarding the increase in retirement age may also be problematic for another reason – it would take some time.
For example, Congress can introduce a higher retirement age, which begins to come into force in 10 years, and then the system passing with a higher retirement age would take 30 years.
During the transfer of age from saying 67 to 69 it would bring savings to the program in the long run, “they will need money now,” said Biggs.
Retirement age and economy
According to Rangvid, the reform of social care, which began in Denmark in 2006 – with the retirement age increased along with life expectancy – was “extremely important” for the country's economy.
“Basically, we don't have public debt,” said Rangvid.
In contrast, the US is in the face of a high domestic debt, which requires a country Give more in relation to interest payments than in the army.
Budget regulations, which are currently being considered in the congress, may add $ 3.3 trillion is estimated According to the committee of the responsible federal budget for debt, including interest.
This package would not affect social insurance or retirement age. However, other proposals suggest that changing, cutting benefits that would be a “quite powerful lever” to help solve the program financing problems, according to Munnell.
One proposal conquered At the Social Insurance Administration Department, they stated that raising the full retirement age to 70 would eliminate 26% of the 75-year program shortage.