Denmark raised its retirement age last week to 70 for Danes born in 1971 or later. Workers currently become eligible for the Danish equivalent of Social Security at age 67, which will go up steadily in the coming years. See: The New Retirement Age in Denmark is 70:
This is the result of a reform passed in 2006 that ties the retirement age to average life expectancy at age 60. The typical longevity of retirees in developed economies long ago surpassed the estimates that were baked into government retirement programs when those entitlements were created. That’s a blessing for individuals and families but a curse for government finances. Denmark is trying to ensure it can fund its program and keep the system solvent without imposing an ever-increasing fiscal burden on younger workers.
…There aren’t politically easy answers, and people in physically demanding professions might struggle to work additional years in those same jobs. Yet there appears to be a cross-party agreement in Copenhagen that leaving the retirement age unchanged is reckless.
…As a reminder, the U.S. system of Social Security is projected to be insolvent in 2033, at which point the checks to retirees will suddenly be 21% smaller. Nobody wants this to happen, but nobody wants to take the heat for proposing real reform, so the U.S. keeps barreling toward a cliff while pretending not to notice.
With life expectancies of 80 years or more, more of this is inevitable in other developed economies. In the United States, full government-sponsored retirement benefits are currently available at age 66, whereas in Canada, they are available at age 65. Germany, under Angela Merkel, went the wrong direction, lowering the retirement age to 63 from 67 for some workers. France raised its retirement age to 64 from 62 under a reform pushed through by President Emmanuel Macron.
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