PITTSBURGH (KDKA) — French citizens have taken to the streets in sometimes violent protests against raising their retirement age from 62 to 64.
As KDKA money editor Jon Delano explains, it comes as the U.S. slowly raises its retirement age to 67.
For many Americans and other Europeans, for that matter, the French seem very lucky to have a full pension even at age 64. For Americans born in 1960 or later, the retirement age is 67 with full Social Security.
“Back in 1983, Ronald Reagan took action and raised the ultimate retirement age to 67,” says Ward Garner, a certified financial planner.
President Reagan and House Speaker Tip O’Neill cut a bipartisan deal to save Social Security by raising both taxes and the retirement age, knowing that they and members of Congress would be long dead before it took full effect in 2027.
Other countries have already raised the age with Denmark, Greece, Iceland, Israel and Italy now already at age 67.
The Netherlands, Portugal, Australia, the United States, Spain, Ireland and the United Kingdom are at the age of 66.
Of course, many Americans are trying to retire earlier, Garner says.
“Most people start their Social Security distributions at age 62 or shortly thereafter,” says Garner.
But if you do, you lose 30 percent of the regular Social Security check.
If you can work until age 70 before taking Social Security, you’ll get a much larger monthly check.
“If your normal retirement age is 67 and you choose not to collect unemployment benefits until the mandatory age of 70, you will collect 124 percent of your normal retirement age value,” says Garner.
Surprisingly, nearly one in 10 75-year-olds is working, and high inflation and underperforming 401ks and IRAs are keeping many on the job.
Some who retired are now working again. This makes the right retirement age a very personal decision.
“The desire to retire is there, but the ability is often lacking,” says Garner.
As we can see in France, it is politically difficult to raise the retirement age.
Reagan and O’Neill were right. If you are going to raise the retirement age to 68 or 70, do it far in the future. That’s what Ireland and the UK are doing, raising their retirement ages to 68 in 2028 and 2037 respectively.
So far, America has yet to follow suit.