While states’ and cities’ struggles with their unfunded pension liabilities are front and center these days, the underlying issue of inadequate pension funding is more widespread — i.e., most Americans have not saved enough for retirement. Regardless of whether people are covered by a state or municipal pension or not, if they are not financially prepared for retirement, someone else will have to take care of them. One way to deal with this issue is to raise the retirement age.
In an effort to stem the tide, the UK is set to announce that the age at which people can receive benefits from their government plan will rise to 68 in the 2030s, which is a decade earlier than previously planned. Government officials cite increased life expectancy as the main reason for the change. The move will save the UK an estimated $657 billion; even more will come from other announced modifications. Other European countries are considering similar moves.
