Friday, May 28, 2010

Retiring is weird

Great post from the Economist's Free Exchange blog on the history and structure of pension provision.

...governments must address their demographic time bombs sooner rather than later. Not only to get their fiscal houses in order, but to re-adjust retirement expectations. A later retirement age, indexed to life-expectancy, should be part of any plan. This will give individuals more certainty about one significant part of their retirement income and the appropriate retirement age. These facts are necessary to make a good decision about how much you need to save. For most people working longer and saving more is their only shot at a comfortable retirement.

I agree with this, but I'd go one step further. I'd like to see the concept of a retirement age thrown out all together. People would simply accrue retirement benefits that got more valuable as they got older, and every individual could decide at what point they wanted to make the trade-off.

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