Denmark has moved to increase its retirement age to 70, so it is the highest retirement age in Europe.
However, it can be difficult for the United States to follow its example.
The new change in Denmark will apply to public pension retirements from 2040. Since 2006, the country has been adjusting its retirement age to reflect changes in life expectancy.
The United States technically does not have an official retirement age. At 65, people become eligible for Medicare’s coverage. At 66 to 67, depending on the date of birth, an individual becomes eligible for complete social security benefits based on their profit registration.
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However, those who wait until 70 years to claim the benefits of social security retirement have the highest payment, an increase of 8% for each year beyond the full age of retirement. (The full age of retirement is when the beneficiaries are eligible for 100% of the benefits they have obtained based on their work records).
However, few people wait until 70 to claim benefits. While more than 90% of people would benefit from delaying Social Security until that age, only about 10% really do, according to a 2023 article of the National Office of Economic Research.
While 70 years is not the official retirement age of the United States, it is the threshold based on the definition of economists: the age of what cannot be more benefits, according to Teresa Ghilarducci, a labor economist and professor of the new school for social research.
“In the United States, 70 have passed for decades, and we were the oldest retirement age than any other country for years,” said Ghilarducci.
Retirement age in the United States for debate
However, there are efforts to increase the retirement age of the United States.
In 1983, Congress approved legislation to gradually raise the full retirement age for Social Security From 65 to 67. That change is still being eliminated today, with people born in 1960 and then subject to the oldest retirement age 67.
In December, Sen introduced an amendment to raise the full retirement age to 70. Rand Paul, R-Ky., Duration of last minute efforts to advance the legislation that increased the benefits of social security for certain public pensioners.
The bill, the Social Security Justice Law was voted by law. However, the proposal to raise the retirement age was attacked.
Paul asked to increase retirement age in three months a year until he reached 70 years to reflect the hopes of current life. The change would have created almost $ 400 billion in savings for the program, while the Social Security Equity Law added $ 200 billion in costs to the program of about 10 years.
Other republican proposals have also requested to increase retirement age.
The Social Security Administration faces the imminent dates of exhaustion for the trust funds on which it is based to help pay the benefits. To help solve that problem, legislators can consider increasing taxes, reduce the benefits or a combination of both. Increasing retirement age is effective a benefit cut.
Like the changes promulgated in 1983, increasing retirement age could be in the menu.
Denmark’s movement ‘sends a signal’ to work more
The Denmark movement to raise retirement age to 70 is not a surprise, experts say.
In 2023, the research published by the Danish Social Sciences Research Center found an increase in good health and educational resources for young people from 60 to 70 years, together with a greater demand for older workers, for increases in the retirement age in the future.
In 2025, Denmark residents can retire with public pensions when they are 67 years old. That will gradually increase to the 70 axis of the years of 2040.
“That means that simply the youngest people of today will have to work more before they retire,” said Jesper Rangvid, a finance professor at the Copenhagen Business School and co -director of his pension research center.
This retirement age affects everyone with the right to the basic income of the public guest house, cordination to Rankvid. However, those with private pension savings can be withdrawn before.
“There is nothing that prevents you from retiring before if you have the funds and the means to do it,” Rangvid said.
Denmark offers options for early retirement, including an early pension. However, increasing retirement age transmits a message, Rangvid said.
“He sends a sign that this is what the positions would like, which you should work longer,” Rangvid said.
Increases in retirement age in the US can be problematic
Retirement experts say that increasing the retirement age of the United States does not present the same solution for the population in Denmark.
Denmark has an “equal society” when it comes to income, wealth, education and life expectancy compared to the United States, said Alicia Munnell, main advisor to the Retirement Research Center in Boston College.
In the United States, government data shows a big difference between life expectancy for those in lower and higher income quartiles, Munnell said.
“When you have a big difference, any general increase in retirement age is silly,” said Munnell. “It would be immensely detrimental to those at the bottom that already receive benefits for a shorter period of time.”
A policy to raise retirement age is also problematic for another reason: it would take time to calculate the change, according to Andrew Biggs, main member of the American Enterprise Institute.
For example, Congress can and act a retirement age that begins to enter into force in 10 years, and then people with a high retirement age would go through the system.
While moving the age of Say 67 to 69 would produce savings for the long -term program, “they will need money at this time,” Biggs said.
The retirement age and the economy
The well -being reform that was in Denmark in 2006, with the retirement age, increased with life expectancy, has been “extremely important” for the country’s economy, according to Rangvid.
“Basically we have no public debt at all,” Rankvid said.
In contrast, the United States faces a high national debt that requires the country to spend more on interest payments than in the Army.
The budget legislation that is currently being considered in Congress could add an estimated $ 3.3 billion to the debt, including interest, according to the committee of a responsible federal budget.
That package would not touch Social Security or its retirement age. However, other proposals have suggested that the change, a benefit cut that would be a “quite powerful liver” to help solve the programs financing problems, according to Munnell.
A proposal qualified by the actuaries of the Social Security Administration found that increasing the full retirement age to 70 would eliminate 26% of the 75 -year -old programs.