As a relatively new addition to the workforce, retirement is
a dim and almost imperceptible event on the distant horizon.  Crowding it out in the more immediate term are
the following fairly important life milestones: marriage; buying a house;
having children; and working for another 40 odd years.  So the thought that the retirement age must be
raised in our ageing society does not really affect my sleep at night – another
40 years of work or another 45 years? From my point of view, it’s still a long
time and really, what’s the difference? Of course, I can understand that for
people in parents’ generation (married for over 35 years, house bought and paid
for, children begat and departed from home) retirement is the next big
milestone.  Finally, after years of tax-paying
toil, work will no longer be a requirement. 
For them, the thought of an additional few years before the pension
kicks in must be somewhat alarming.

No matter the perspective that one is viewing retirement from,
according to the Economist, our ageing population requires a rethink on our
approach to the idea of working into old age.  The issues
should be somewhat familiar to the discerning and intelligent readers of this
blog:

“Since 1971 the life expectancy of the average 65-year-old
in the rich world has improved by four to five years. By 2050, forecasts
suggest, they will add a further three years on top of that. Until now, people
have converted all that extra lifespan into leisure time. The average
retirement age in the OECD in 2010 was 63, almost one year lower than in 1970.”

And because we are not reproducing ourselves:


“…declining fertility rates imply that by 2050 there will be
just 2.6 American workers supporting each pensioner and the figures for France,
Germany and Italy will be 1.9, 1.6 and 1.5 respectively. The young will be
shoring up pensions systems which, as our special report this week explains,
are riddled with problems.”

This has led some countries to raise the retirement age and
some to ignore the problem:

“Most governments are already planning increases in the
retirement age. America is heading for 67, Britain for 68. Others are moving
more slowly. Belgium allows women to retire at 60, for instance, and has no
plans to change that. Under current policies the mean retirement age by 2050
will still be less than 65, barely higher than it was after the second world
war.”

According to the Economist, working longer will result in
more years of wages for employees, more tax for governments and less in pension
to pay and a growing economy as more people are in work.  However, getting people to work longer can
only partly be achieved by governmental policy:

“…working
practices and attitudes need to change. Western managers worry too much about
the quality of older workers…In physically demanding occupations, it is true,
some may be unable to work into their late 60s. The incapacitated will need
disability benefits. Others will need to find a different job. But this should
be less of a problem than it used to be now that economies are based on
services not manufacturing. In knowledge-based jobs, age is less of a
disadvantage. Although older people reason more slowly, they have more
experience and, by and large, better personal skills. Even so, most people’s
productivity does eventually decline with age; and pay needs to reflect this
falling-off. Traditional seniority systems, under which people get promoted and
paid more as they age, therefore need to change.”

At least in parts of Asia and in the West, we have a population
that is greying and not producing enough workers to sustain current retirement
levels.  Will we be able to change our
habits and ingrained ideas on how retirement is meant to work to keep pace with
our societies changing demographics? Or will we bury our heads in the sand and
ignore the problem until it becomes too pressing (and expensive) to ignore?    

Marcus Roberts was two years out of law school when he decided that practising law was no longer for him. He therefore went back to university and did his LLM while tutoring. He now teaches contract and...