The concept of retirement, often associated with rest and relaxation after years spent in the workforce, is being redefined across the globe. A recent exploration into demographics by Visual Capitalist delves into the retirement ages across 45 nations, revealing differences that have both economic and cultural underpinnings.
Visual Capitalist distinguishes between the “current retirement age,” the age at which one can retire without pension penalties after starting work at 22, and the “effective retirement age,” the average age at which workers aged 40 and above exit the labor force. These ages often don’t align. For instance, while countries like Iceland, Israel, and Norway have a current retirement age of 67, their effective retirement age is somewhat lower. Conversely, Saudi Arabia’s current retirement age stands at a mere 47, but many continue working well beyond that age.
Such discrepancies hint at a multitude of factors at play, from career start ages and industry-specific norms to broader market demands and national policies. The global landscape is multigenerational: many Asian nations, including China, India, and South Korea have official retirement ages in the late 50s to early 60s but see their workforce active into their late 60s. Meanwhile, in most European countries, and in the U.S., and Canada, a significant portion of the workforce retires earlier than the current retirement age.
For the U.S. workforce, this trend suggests a potential shift in retirement planning and labor market dynamics. As more workers retire earlier than the stipulated age, there could be implications for social security systems, pension funds, and labor market supply. Other studies show how some workers retire but then decide to reenter the workforce later on.
Changes in gender demographics further complicate this picture. In the majority of countries surveyed, women tend to retire earlier than men. However, countries like Argentina, Estonia, Finland, France, and Luxembourg contradict this trend, with women retiring later.
France’s recent decision to raise its early retirement age sparked significant debate, revealing the tension between economic sustainability and individual well-being. With aging populations in many developed countries, including the U.S., combined with growing labor shortages, it’s plausible that retirement age adjustments will become more frequent in the coming decades. The organization for Economic Co-operation and Development (OECD) even projects a two-year increase in the average effective retirement age by the mid-2060s.