The myth of retirement entitlement

The recent announcement in the 2009 Australian Budget that the official retirement age would be raised from 65 to 67 caused a bit of a stir in a few places.  Many commentators took the view that this was an encroachment on their "hard earnt" retirement years. This struck me as somewhat strange - when did we, as a society, start to expect 20 years of uninterrupted leisure at the end of our lives?

When the Aged Pension was introduced in 1909, the qualification age was 65. However the average life expectancy of men and women was only 55, meaning that most people never lived long enough to receive it (ref). Those that did were much closer to the end of their lives than the 65 year-olds of today, who can expect to live until their mid 80s.

I mean, it's a nice idea: work hard for 45 or 50 years then get 20 years "off" to wind down. I can certainly see myself enjoying that. But what was originally intended as a safety net for those blessed with an above average lifespan has become a method of funding able-bodied people's inactivity. Of course not everyone at 65 is still fully capable of  working, especially if they've had a physical career. These people should be taken care of, but not necessarily via an aged pension.

The aged pension is a blunt tool. It's very easy to identify someone who qualifies: they are past a certain age and below a certain level of wealth. Using measurements like this makes sense past a certain age, where the number of people capable of working full time is very low. When first introduced, of the few people who made it past 65 very few would have been able to work. These days however the age where most people would be incapable of work is much higher, although I won't pretend to know what it is. Of course for many people, especially those in physical careers, 65 may well be an accurate age. But the average office-worker has had much fewer demands put on their body over their working life and require much less physical ability.

Perhaps a wiser move, particularly given our rapidly aging population, would be to move the aged pension age to say 75 whilst introducing individual assessment-based capability reviews for people between 65 and 75.  This has the potential to be over-burdened by bureaucracy (as the current invalid pension is) but assuming that it could be fairly implemented it has the potential to reduce the cost of aged pension retirees considerably.

The financial side of things is only a part of the issue though. It's rather depressing to spend 50 years of your life focusing on how you'll live your last 20, should you be lucky enough to get that long. It seems to be a waste of a life, and could only be entered into by people who are fundamentally unhappy with their working lives. Surely it makes infinitely more sense to build a life that you are passionate about.

For most of the species' history, and for most of the world's current population, people work from the time they are first able until they cease to be able simply as a matter of survival. To expect 20 years of social security, paid for by the next generation, seems quite unreasonable. Complaining that you may get 2 years less is down-right selfish.

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