Countries with public pension programs should gradually increase their retirement ages to delay withdrawals by workers who are enjoying longer life spans, according to the international policy group Organization for Economic Cooperation and Development.
Pensions are increasingly expensive for governments partly because retirees from the huge baby boomer generation, with longer life expectancies, are starting to take their pensions.
“Breaking down the barriers that stop older people from working beyond traditional retirement ages will be a necessity to ensure that our children and grandchildren can enjoy an adequate pension at the end of their working life,” OECD Secretary-General Angel Gurría said.
The recommendation comes on the heels of French President Francois Hollande’s announcement that he would keep the retirement age at 60 for those who started work when they were 18 or 19 years old. This would reverse the plan of Hollande’s predecessor, Nicolas Sarkozy, to raise the retirement age universally to 62.
The report released Monday by the OECD also said that countries that have mandatory pensions will be in a better position than countries that rely on voluntary private pensions and fewer public pensions.
The U.S., along with other countries such as Germany, Ireland and Japan that rely more on private pensions, will pay retirees about 50% of their previous earnings. But countries with more public pensions will be able to pay 60%.