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Home Publications Blogs Beat the Press Number Games: The Retirement Age in France is Already 65

Number Games: The Retirement Age in France is Already 65

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Tuesday, 19 October 2010 04:50

If you asked people what the retirement age is for Social Security most people would probably say 66, or perhaps age 65 if they missed the fact that the age for full benefits has been increased. However, workers can qualify for early benefits at age 62 and most workers do in fact start collecting benefits shortly after reaching this age.

This is why it is very disturbing to see the NYT and other reports on France routinely refer to President Sarkozy's plan to raise the retirement age in France from age 60 to 62. This refers to the early retirement age. The normal retirement age is already age 65 and would rise to age 67 under Sarkozy's proposal.

In the same vein, the article refers to a plan by Germany to raise its retirement age to 63 without noting that this refers to the early retirement age. The age for full benefits in Germany is currently 67.

The article also points out projections for declining ratios of workers to retirees, which will put pressure on retirement systems. It would have been helpful to point out that real wages are projected to increase at the rate of approximately 1 percent annually. This would allow workers to spend a larger portion of their life in retirement if they opt to take a portion of this gain in longer retirements with somewhat smaller pay gains.

Comments (7)Add Comment
...
written by izzatzo, October 19, 2010 8:06
This would allow workers to spend a larger portion of their life in retirement if they opt to take a portion of this gain in longer retirements with somewhat smaller pay gains.


History will show who the true patriots were in
America during the Deep Recession, the ones who chose early SS retirement and a 25% pay cut in order to reduce the deficit and burden on younger generations. It was the least they could offer as repentance and payback for their gluttonous irresponsible overconsumption of housing and the wealth it created which ultimately destroyed the economy when it vanished.

It's not really longer retirement because adding 3 years on the front end just clips 3 off the back end, like a voluntary death panel so others may live. There's already plans by Teabaggers to erect a monument to The '62 Ers and how they saved America from socialism.
interesting...
written by Brett, October 19, 2010 8:11
Did not know this. The NYT has been regularly writing in all it's reports on France that the retirement age might move from 60 to 62 --> I was assuming that meant full benefits. Thanks...
...
written by skeptonomist, October 19, 2010 9:25
The demographic squeeze is not nearly as bad as it's usually made out to be - for example the percentage of working-age people in the US is projected by the Census to stabilize around 2035 at 57% compared to 63% currently. The actual fraction of working people is subject to other things, for example the fraction of married working women, which in the past has varied much more than the overall figure. But there is reason to be concerned about growth of wages - this is the real problem. Dean gives a projection of 1% growth - does this apply to all wages and salaries or only to those below the SS limit? Does it include federal workers, who mostly aren't in SS, and whose compensation has grown much faster than the average? The record of wage growth since the 70's has been dismal, and I see little that has been changed to make it better.

The graph here http://www.skeptometrics.org/E...n_Earn.htm
puts lower-end wage growth in the context of GDP and federal expenditures.
Dum Luks
written by Martin Langeland, October 19, 2010 1:45
Puzzling. "Early" retirement is penalized by reduced benefits. Who retires early? I believe it is often those who worked on factory assembly lines, hard construction and similar jobs which tend to debilitate while not providing a cushy pension. That is, the ones who need social security the most. The white collar and professional types who live the longest can wait and reap the higher stipend for a longer time, along with the annuities they purchased with their more generous wages.
Given that Social Security is a self funded program, through the payroll tax, this unfairness makes a certain sense: those who put in the most get the most. But since it is also an insurance scheme to provide the commonweal with a way to maintain the old, it is upside down. The solution I see is to lower the eligibility for full pensions to 62 for all, with the option to continue working full time instead if one is able. This to be funded by first eliminating the cap.
Alas such a change would require the country to change from rugged self centric to an understanding that, like it or not, we really are all in this together.
--ml
Federal employees do pay Social Security Taxes
written by WWV, October 19, 2010 4:59
All Federal Employees with less than 26 years of service have been paying into Social Security ever since they were hired. In addition, many employees hired during the 1970s voluntarily switched from the old CSRS pension plan to FERS - a smaller pension (1% x years of service x pay)+ Social Security + 401k plan in the 1980s. Most of the remaining feds not covered by Social Security are already eligible to retire but wish to continue to serve the public.
Also need to have worked 40.5 years.
written by blhab, October 19, 2010 6:21
I also read you have to have paid into Social Security for 40.5 years to be eligible for early retirement!

Under current rules, both men and women in France can retire at 60, providing they have paid social security contributions for 40.5 years. Meanwhile, public sector workers retire on 75% of their final salary.

http://www.bbc.co.uk/news/10326002
Martin @ 12:45 says
written by diesel, October 19, 2010 9:14
"like it or not, we really are all in this together." That's the keystone of the arch, but unfortunately a sizable portion of Americans simply don't hold that belief. Instead they regard it as subversive.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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