Rethinking Retirement: Why Seniors Can And Must Keep Working
A heated national debate in Germany over raising the retirement age is posing the wrong questions. A German writer in the U.S. sees a different solution.
SAN FRANCISCO — In the Natural History Museum in the California Academy of Sciences, one can learn a great deal about the Earth, the Solar System and the creation of the Universe. But we can also learn a lot about the way Americans organize their lives.
On a subterranean level of the San Francisco museum, a retiree named Steve is showing some children how they can pet star fish and what that teaches them about nature. Steve comes to the museum a couple of times a week, as a volunteer, because he thinks it’s a way of giving something back to society.
A few miles away, a retired lawyer is helping organize the community’s voting register. Why? Because she too wants to give something back to society — now that she finally has time, and while she still can.
Anybody who sees the elderly lady, or the man in the museum, is getting a glimpse at the future of our society, best-case scenario. In the U.S. there is a tradition of retirees working as volunteers in museums, foundations, and the community.
That's not the case in Germany. What’s all the more surprising is that Americans get a lot less state benefits, so would seemingly have fewer reasons to give society anything when they are older.
Germany is in the midst of a passionate national debate about how long people should work before they are entitled to receive their pensions — whether they should retire at 65 or at 67.
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An idle bike in Bonn. Photo: iurikothe
Slowly the generation of those who are going to have to work until 67, those born in 1964 and later, are coming to realize that the real issue at stake is something else. Life in old age is going to change fundamentally, no ifs, ands and buts about it. Never were more babies born in Germany than during the mid-1960s. But these people had far fewer children than their parents, and their life expectancy is far higher.
That means that by the middle of this century, more than one-third of Germans will be over 65 years of age. And that mainly means that the generational contract as it presently stands won’t work anymore. Not economically, and not socially.
This is in part because fewer young people will have to earn pensions for ever more older citizens. But it's also because today’s and tomorrow’s retirees, thank God, will grow much older than their ancestors.
A battle for 2 or 20?
It comes as a surprise, therefore, that in the debates about retirement age, two statistics are rarely considered together: in the post-War years, life expectancy of Germans has risen by more than 10 years, yet a measly two years is bitterly fought over when it comes to retirement age.
In the future, when people live even longer, this discrepancy will stand out more because many German retirees are going to be enjoying 20 years of retirement. Can a society afford for so many of its members to be subsidized for 20 years? No, it cannot.
The classic retirement model gave people exhausted from a long working life the guarantee of a few peaceful years at the end of their lives. But already today many retirees are in very good mental and physical condition for a good two decades after they stop working, and some don’t want to give up their work.
We are now back with Steve in San Francisco. Without people like him, a lot of things in the U.S. wouldn’t function. Museums would close. There would be less remedial teaching for children. Truth be told, aging Germany isn’t going to function either without such people. Many Germans will also have to work later in life for purely financial reasons: they’re not going to be able to manage on pensions alone.
Most people around 50 today don’t appear to realize that. Many can’t even imagine that when they reach their mid-60s they’re going to have to drop doing work they may very much still enjoy. And since they know that their life expectancy is markedly higher than that of their parents, they devote some thought to the advantages they and society could get out of this.
Given that working into their 70s is a real possibility, couldn’t they work less between the ages of 30 and 40 in order to have more time with their families? Wouldn’t the higher life expectancy be better used by balancing out working far too hard when young, and possibly having far too much time on their hands between 65 and 85? Isn’t that the more salient debate — not the one about whether retirement age should be at 65 or 67?
And even if retirees like Steve still work in museums, without actually earning any money, their work is nevertheless valuable. By contributing to the public good, Steve remains a part of society. Many in Germany are familiar with the mechanism. Grandparents may look after their grandkids while their children are out working, for example. But in Germany it remains private.
Those who are in their 50s today will have to consider whether they want to leave things as is, or in view of demographic developments, forge a new generational contract, one that encourages and perhaps even obliges people retiring at 65 or 67 to give something back to society in the 10 to 20 years of their retirement. It would be a contract that would also let people work longer, if they wanted to, and in return give them some time for their families during their younger years.
That’s the difficult news for people born in the 60s. In old age, they’re going to have contribute more to this country than their parents do. The good news is: They’ll be needed, very much so.