Does the world face a retirement crisis?

Perhaps the biggest crisis facing the world in the 21st century: Retirement.  An "aging population is stressing retirement safety nets such as Social Security," said BlackRock CEO Larry Fink, per The Wall Street Journal  — a problem that will only get worse as medical breakthroughs help people live longer. A "tremendous" effort goes to that medical innovation, Fink said, "but not even a fraction of that effort is spent helping people afford those extra years."

Fink's solution to the "retirement crisis?" Raise the retirement age. "No one should have to work longer than they want to," the 71-year-old billionaire wrote in his annual letter to BlackRock shareholders. But the tradition of retiring at 65 "originates from the time of the Ottoman Empire." Now demographics are quickly changing. In 2019, fewer than one in 10 people around the world were older than 65 — that number will be one-in-six "by the midcentury mark."

For some, a crisis is already here. "Retirement is becoming a luxury in the U.S.," Business Insider said. The portion of older Americans still in the workforce has risen steadily in recent years, from 11% in 1987 to just under 20% in 2023. The reasons include the disappearance of pensions, debt problems — home, student and medical — and the rising cost of living. If you're in your 50s, one expert said, you should ask yourself: "Am I doing a job that I would be happy to do a little bit longer if I had to?"

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What did the commentators say?

"Working in old age can't be the only answer to the retirement crisis," Peter Coy said at The New York Times. He cited Teresa Ghilarducci, a labor economist, to argue for shoring up Social Security while also creating a government-sponsored pension plan for workers who don't receive such benefits from their jobs. But it's also true that as people live longer, they have had to "stretch their savings over more years out of the work force." Working longer solves that problem — but only for those who want to. "Imposing what are effectively work requirements on older people is harsh."

"Progress on life expectancy has been very uneven across U.S. society," Matthew Yglesias said at Bloomberg. Educated Americans are living longer "but those without bachelor's degrees are not." This means that raising the retirement age "essentially singles out the very worse-off class of elderly people — and makes them worse off." That is "peculiar and cruel."

Raising the retirement age is the "least bad option," said Karl W. Smith, also at Bloomberg. Social Security is already paying out more in benefits than it receives in taxes. That means some kind of shift will be needed. Raising the retirement age to 69 — a proposal from Republicans to shore up the system — would bring costs in line with revenue. Democrats have objected, but math is math: For Social Security, "raising the retirement age would create savings that grow over time."

What next?

Fifteen states have already established automated savings plans known as "auto IRA" for workers whose employers don't provide a retirement plan, Pew's John Scott said at The Hill. That's a way to help workers "close the gap between what workers can save and what they need for retirement." The plans have proved popular — and would benefit more Americans if made available more widely. "We need to make it easier, not harder, for everyone to have the opportunity to save for retirement."

The retirement crisis is likely to become part of the debate surrounding the 2024 presidential election. Republicans have presented their plan to raise the retirement age. Another possibility is to tax the rich to strengthen and expand Social Security. A cap on taxes paid into the program means a "billionaire pays the same amount of money into Social Security as someone who makes $168,700 a year," Sen. Bernie Sanders (I-Vt.) said in an op-ed for Fox News. Congress has the ability to change that and "support a secure retirement for working Americans."