A few days ago, economist Tyler Cowen did it Sub-observation This surprised me a little: today’s French people enjoy “the longest retirement raised in the history of the world.”
The verification of the “World History” part is beyond my historical skill level. that is, OECD pensions in a 2023 browsing report It is confirmed that French retirees are enjoying their jobs for many years.
According to the report, the average age of French men is 60.7. By then, their life expectancy is 84, meaning they can expect to retire for 23 years, more than any other country examined by the OECD (mostly wealthy companions as well as some other options). French women can expect retirement for 26. 1 year, which will be defeated by Luxembourg, Spain, Slovenia and world leader Saudi Arabia, but remains high. (The Saudi case is more about women’s less and shorter jobs than in looser politics than in retirement policies.)
Compared to Americans, both French men and women can expect to retire for more than five years.
By the way, the French government fell this week as opposition parties demanded a central power coalition Redecide to raise the official retirement age from 62 to 64. Retirement funds are expensive for each person aged 23 to 26, which is why President Emmanuel Macron first raised his age, but failing to pay the money when the group of older voters grows in size can be suicide.
Retired, American style
As a non-French, this battle inevitably reminds me of the impending retirement war in the United States. Our Social Security Trust Fund is due to Depleted for about eight years. Under current law, when this happens, retirees will see a whole section About 23% on their level of interest. I know everything about how the U.S. government works Tell me this won’t reach this point. Well, the problem is to prevent these cuts from happening.
One obvious way to avoid the French plight is to do what Macron does: raise retirement age. There are two components to encounter aging problems in pension systems in the United States and other wealthy countries. One is that, due to the size of the baby thrives, there are more people than ever before. quantity Retired workers receive new social security It reached 3.4 million in 2022, while it reached less than 20 million in 2000.
Raising retirement age does not solve this problem. But this does partly solve the second problem, that the average time of retirement has risen as nutrition and medication improves. A man born in 1900 and 1965 years old can Expect to live another 12.9 years. Social Security Bureau estimate A man born in 1960 and 65 years old this year is expected to have another 18.4 years. Even consider The trend of people demanding social security in their future liveswhich is the additional years the plan must pay for each male retiree.
Between 2000 and 2022, the United States Gradually increase retirement age All Social Security Benefits for ages 65 to 67. However, most bipartisan proposals for reforming social security (that is, any proposal for passes) are considered to be some age increase. Two years ago, Sens. AngusKing (I-Me) and Bill Cassidy (R-La) float Increase the normal retirement age to 70. The bipartisan policy center brings together some former politicians and experts from both sides Make a planand finally advocated 69 years old.
One of the key political virtues of growing retirement age is that it is a cut benefit that is not as obvious as it is cut.
But that does constitute a cut, and it may be a big one. Now, a 67-year-old woman can Expect to live another 18.5 years. Suppose she has to wait until she is 70 to ask her to claim the same benefits she can now claim at 67. This swallowed her 18.3 of her expected earnings for 5 years, cutting more than 16%. In the case of shorter lifespans, men’s cuts are even greater in percentage terms.
The most important question to ask, though, is it a comprehensive welfare cut or a regressive. There is a strong argument to the latter.
Death inequality and social security
Famous social security expert and economist Alice Munnell Recently highlighted the chart From the Actuary Office of the Program This highlights a considerable amount of about the gaps and trends:
If you don’t speak social security terms, this can be difficult to parse. Essentially, it compares two groups: considering retirement in 1992, males were born in 1992, while men born in 1960 were considering retirement in 2022. In both groups, there is a huge gap in expectations between the person who gets the least in his career and the person who earns the most. In 1992, the highest person might be 8.4 years older than the lowest person. In 2022, they may expect another 10.3 years. (The “highest income” here means one-fifth, which is not Elon Musk’s money: 2020as a person, in the highest quintile, means an average monthly income of at least $6,391, or $76,692 per year. )
In other words: not only is there a huge life expectancy gap between the rich and the poor, but the gap seems to be growing.
This makes retirement age discussions differently. Assuming we are considering increasing the normal retirement age (now 67), but rather the age (now 62), at which point the retiree can request a lower income. If we raise our age for three years, the highest-paid men will cut 3 points to 25.6, or about 11%. The lowest-income males cut three times and removed 15.3, or almost 20%. If you are considering raising the normal retirement age or looking at specific numbers for female workers, the overall gain is the same: the cost of raising retirement age is greater for poorer workers.
Recently, economists Henry Aaron In Brookings and Mark Voshosky There is a fierce controversy over how to understand these numbers. Warshawsky believes Oppose the above life expectancy figures, citing that they inevitably need a prediction to make the prediction (of course, we don’t know how long people who retire in 2022 will actually live, mainly because most of them have not died yet), and limit the analysis to men aged 65-69. Aaron believes this is too restrictive (everyone, including insurance companies, also relies on life expectancy predictions), and ignores the increase in women’s life expectancy inequality.
As far as my non-expert is concerned, Aaron performed better in this particular dispute. But it is worth stressing that the lifespan gap between the rich and the poor does not have to be Increase Retirement age degenerates online for hiking. If the rich have 10 years of retirement life than the poor in 30 years, then even if the gap itself does not grow, the increase in retirement age will still be more difficult than the rich.
this Traditional Republican Social Security Methods It has been calling for its shortages to completely cut benefits and closed down; Traditional democratic approach Already rely entirely on tax rate hikes. None of this happened, especially if the Senate lawsuit still exists.
I highly doubt that 50 Republicans in the Senate are willing to vote for significant benefits, and 60 are actually not needed. Similarly, I think the chances of the Democrats electing 60 senators willing to pass huge tax hikes, and even the highest income people are close to zero.
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If reforms are to be made, it will have to be bipartisan-based and involve considerable concessions from both sides before the launch of the trust fund in 2033. And I suspect some retirement age will be part of the deal.
If this happens, the best option is Wendell Primus, Tara Watson and Jack Smalligan outline in recent Brookings reform plan. They will raise the retirement age, but only apply to the top 40% of the top earners. Most retirees simply don’t see the age increase, while the highest earners will see it rise to 70. People with the 60th to 80th percentile will see smaller hikes. In addition to other progressive tax cuts and taxation plus the plan will address the plan’s solvency problem.
This change in retirement age will make the system more complicated because people have to look for their specific retirement age based on their income. But that’s the only plan I’ve seen, and it prevents the cuts caused by the most popular benefits from a painful return.
