Sunday, December 8, 2019

Working past retirement age

Retirement is like the carrot you can never quite reach. Not only does the retirement age keep moving as life expectancy increases, but also the cost of living keeps increasing, making a comfortable retirement harder to achieve.

The first recorded retirement plan was in 1881 in Germany when the retirement age was set to 70 with the promise of a government funded pension. Given that the average life expectancy at that time was less than 60, this was a fairly safe bet. It was later reduced to 65, still not a great risk of having to payout.

In my case, a divorce after 21 years of marriage left me starting from scratch in my late 40s where most people should start saving towards retirement in their early 20s; of course, many do not. As soon as I found full time employment, after I moved to the US, I did put money into a 401K. After two years a small setback restarted the clock. My boyfriend at the time 'talked me into' withdrawing the cash when I moved jobs. Not only did I take a large tax hit, I started from scratch again. Learning the error of my ways I continued to put the maximum amount allowable into my 401K and some employers matched that, if not 100% at least to some extent which helped it grow. Now, after 23 years of carefully managing this process I do have a healthy savings, but still not enough to retire comfortably.

Then, add to that mix, taking on the responsibility of caring for an elderly widowed mother in law. She wasn't widowed when my husband and I made the decision to open our home to her. When her husband was diagnosed with dementia and placed in a home, we couldn't see her on her own. We searched for 6 months to find the right house to support all three of our needs and she moved in with us. Five years later she started losing her eyesight; we decided that as she could no longer drive and would need help with many other things, one of us needed to stay home and care for her, drive her to her many doctor appointments and generally be available. It was a no brainer that my husband was nominated for this task. After all, she was his mother but also his salary was less than mine. Naturally, that reset the clock on any idea I had of retirement. Not only did we sacrifice his salary now I was supporting both of them and a large house. It had to be large in order to satisfy my mother in law's requirement for a master suite downstairs.

I can't really complain because I am extremely lucky to have a good job, with a company who doesn't judge me by my age, but by the work I do. They do value me despite my age. I know this is not always the case with older workers. Companies are all too quick to ease them out, in part I am sure because the longer you work the higher your salary goes and hiring a college graduate to do the same job would definitely be a lot cheaper. Whatever the reason, now past the normal retirement age I am still working full time - and in my profession, software engineering, that generally means 50+ hours per week, with no light at the end of the tunnel.

There are times I would dearly love to not have to get up and go to work. I fondly imagine that I would be able to work out regularly, write and relax. But a little voice inside me says I would probably sit around thinking I should be doing those things but actually doing nothing and getting bored. It is a moot point as I don't see that happening any time soon.

Here is a fascinating comparison of the retirement ages internationally, from this site:

 Current general retirement age (2019)
Future retirement age
  EU Men/ Women Retirement age or men/women
 Austria (AT) 65 / 60 years 65 years (2033)
 Belgium (BE) 65 years 67 years (2030)
 Bulgaria (BG) 66 years and 4 months 67 years (2023)
 Croatia (HR) 65 years / 62 years 67 years (2038) / 65 years (2030); 67 years (2038)
 Cyprus (CY) 65 years 65+ years (2018)
 Czech (CZ) 63 years and 6 months / 63  years and 2 months 65 years (2036)
 Denmark (DK) 67 years; 65 years and 6 months* 67 years (2022); 68+ years (2030)
 Estonia (EE) 63 years and 6-9 months 65 years (2026) 68+ (2027)
 Finland (FI) 63 years 3-6 months . 68 ; 65* years 65+ years (2027); 65+ (2030)
 France (FR) 66 years and 2 months 67 years  (2023)
 Germany (DE) 65 years and 7 months 67 (2031)
 Great Britain (GBR) 65 years 67+ (2028), 68 (2046)
 Greece (EL) 67 years 67+ years (2021)
 Hungary (HU) 64 years 65 years (2022)
 Ireland (IE) 66 years 68 years (2028)
 Italy (IT) 66 years and 7 months 67+ years (2022)
 Latvia (LV) 63 years and 6 months 65 years (2025)
 Lithuania (LT) 63 years and 10 months / 62 years and 8 months 65 years (2026)
 Luxembourg (LU) 65 years –
 Malta (MT) 63 years 65 years (2027)
 Netherlands (NL) 66 years 67+ years (2022)
 Poland (PL) 65 years / 60 years –
 Portugal (PT) 66 years and 5 months 66+ years (2016)
 Romania (RO) 65 years / 61 years – 61 years and 2 months -/63 years (2030)
 Slovakia (SK) 62 years and 6 months 63 years and 2 months+  (2024)
 Slovenia (SI) 65 years –
 Spain (ES) 65 years and 6 months 67 years (2027)
 Sweden (SE) 61-67 years; 65 years* 63-69 (GP; 2023),  63+ (2026); 66 (2023), 66+ (2026)
 Other countries Men / Women Retirement age or men/women
Australia 57 years; 65 years and 6 months* 60 years (2025); 67 years (2023)*
 Canada (CA) 65 years –
 Iceland (IS) 67  years
 Japan (JP) 63 years / 62 years; 65 years* 65 years (2025) / 65 years (2030); –
 Norway (NO) 62-75 years; 67 years* –
 Russia (RU) 60 years and 6 months / 55 years and 6 months 65 years (2028); 60 (2028)
 Switzerland (CH) 65 years / 64 years –
 USA (US) 66 years 67 years (2027)
This paper has an interesting perspective:

"At the same time, the paper offers evidence that more productive workers stay in the workforce longer than less productive ones. Using a standard measure of worker productivity – hourly wages – workers between 60 and 74 are more productive than average workers who are younger. Compared with workers between 25 and 59, the pay premium for older workers is currently between 10 percent and 20 percent of the average wage earned by the younger workers. That pay premium has been increasing for a decade. There is little evidence the aging workforce has hurt productivity."

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