Individual retirement ages

Young & Old, Let's Get it On!
Young & Old, Let’s Get it On!, a photo by AlphaTangoBravo / Adam Baker on Flickr.

I read the following about rising life expectancy in a Danish newspaper (in Danish, translation follows):

»De [ældre] vil være stærkere både mentalt og fysisk. De vil kunne rejse jorden rundt også flere år efter, de har rundet 90 år, og benytte sig flittigt af samfundets tilbud. Vi ser det allerede mere og mere i dag, men det er en tendens, der vil blive forstærket«, siger Peter K.A. Jensen.

[…]

Systemet er bygget op, så pensionsalderen nogenlunde flugter med udviklingen i middellevealderen, hvilket medfører, at pensionen altid starter cirka 19 år tidligere end middellevetiden.

Det betyder, at danskerne ifølge prognosen vil have en pensionsalder på omkring 80 år, når middellevealderen runder de 100 år ved år 2090.


“The [elderly] will be stronger both mentally and physically. They will be able to travel around the world even several years after they have reached 90 and will make frequent use of what society offers. We already see it more and more today, but it is a trend that will be reinforced,” said Peter K. A. Jensen.

[…]

The system is designed so that the retirement age is roughly aligned with the increase in life expectancy, which means that the retirement age will always start about 19 ??years earlier than average life expectancy.

This means that Danes are forecast to have a retirement age of about 80 years when life expectancy reaches 100 years in the year 2090.

Although this quote is from a Danish newspaper, we see similar ideas in most countries these days.

However, two of my aunts died at the age of 50, my mum’s dad at 66, my father-in-law at 69, and nobody has ever reached 90 in my family. Also, the ones that don’t drop dead often start to suffer debilitating diseases in their sixties or seventies.

At the same time, some of my friends have family where everybody seems to live to at least ninety, and they are all sprightly until their late eighties.

I’ve therefore started wondering whether the rising life expectancy is due to some families growing older and older (because the diseases that used to kill them have been eradicated), while other families haven’t seen much improvement at all.

It’s also well-known that your life expectancy varies wildly depending on where you live. For instance, in the Calton ward in Glasgow, men can expect to live to the ripe old age of 53.9 (compared to 75.9 for the UK as a whole).

The huge variation in life expectancy makes it dubious whether it’s really such a good idea just to increase the retirement age across the board. If I’m right and the increasing average is due to some individuals living much longer while others still die in the fifties and sixties, the effect will be that some people will get wonderfully long retirements while other have to work till they drop.

Would it not be better to get actuaries to calculate individual retirement ages, based on family history, genetic profile, employment history, etc.? They could for instance work out each individual’s life expectancy and then set the retirement age to 19 years before this. (They could exclude some lifestyle choices from their calculations, so that you don’t get an earlier retirement age by taking up smoking.)

Of course they would get it really wrong at times, but it would give everybody a decent chance of enjoying a reasonable length of retirement.

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