Americans Could Work Until 70

Working until 70 instead of … 67 (which is official today) before receiving one’s pension? This recipe is not yet the order of the day in the United States, but that day could come. The starting age for retirement, linked to the solvency of Social Security, is indeed being debated. Several candidates for this November’s elections (Republicans or those from the tea party movement) evoke this possibility, while others (from the Democratic side) swear that they will fight to the finish to save the current system.

For the time being, one-third of retired Americans collect their pensions from Social Security alone. Another third, though collecting a supplemental private pension, still finance the core of their retirement through public revenues. These Social Security and Medicare funds post a comfortable surplus of $2.6 trillion (1,865 billion Euros). But as the baby boomers retire — against the backdrop of higher unemployment, as well — the fragile structure is becoming unstable.

Alarm Bell

Starting this year, the fund will distribute more in pensions than it receives in contributions, and by around 2015 the situation will be unsettling. Set up in 1935 to protect victims of the Great Depression, the system’s expenses are increasing to some $708 billion (508.2 billion Euros) for this year, representing 20 percent of total public expenditures — thus alarming the National Commission on Fiscal Responsibility, which will announce its recommendations in December, after the midterm elections.

And, according to some observers, the Democrats have already schemed to preserve the Social Security status quo. Not only has Speaker of the House of Representatives Nancy Pelosi excluded any elected representative having anything even remotely to do with Social Security or Medicare from this National Commission on Fiscal Responsibility established by President Obama, but, what’s more, some elected Democrats have submitted a resolution expressing the Senate’s opposition to any attempt to undermine the system.

For the time being, employees and employers equally contribute 12.4 percent of annual salary under $102,000 (72,860 Euros) for retirement. According to a recent American Association of Retired Persons poll, three-quarters of current adults intend to rely, partly or fully, on Social Security for their retirement.