Most of us fear aging, but the dramatic rise in life expectancy over the past 100 years has meant that we can do a lot more into our eighties, even nineties. This increase in age has thrown up a dilemma of whether the retirement age of 65 is too soon to quit work.
Experts say transitioning to part-time work rather than cold turkey retirement could help both the aged and the economy at the same time.
“there will be relatively more people claiming pension benefits and less people working and paying income taxes”
According to Economics Help, if the retirement age remains fixed, and the life expectancy increases, “there will be relatively more people claiming pension benefits and less people working and paying income taxes. The fear is that it will require high tax rates on the current, shrinking workforce.”
What’s more, there will be an increased government spend on healthcare and pensions, and those in retirement pay lower income taxes because they’re not working. Western governments are becoming increasingly concerned by the combination of higher spending commitments and lower tax revenue – especially those with large debt and unfunded pension schemes.
The knock-on effect will mean that those in work may have to pay higher taxes, which of course will send shockwaves through the global working community. Experts claim this could create a fall in productivity and growth due to workers having no incentives to work. The answer to this problem is to encourage senior citizens to take on part-time work, which not only stimulates the economy but also encourages motivation and increased health benefits.
In Japan, there is a tried, tested and provable model that shows when the older generation go back to work it not only helps the economy but also their lifestyle.
According to Monocle, how to care for an increasingly large aging population is a question that faces every city around the world. But those that answer it by inviting senior citizens to live and interact in their communities are discovering far-reaching benefits, like in the city of Toyama in Japan.
Toyama’s community demonstrates this success by showcasing examples like the case of Eiichi Takeoka, a 90-year-old who lives alone, rises early each day and heads to work. He is a prime example of how taking on part-time work can be beneficial for all concerned. “He is the president of Takeoka Auto Craft, a mini-car company he started in 1989 and now runs with his son, Manabu. He eats well, exercises every morning and gets around in a senior-friendly vehicle of his own design (top speed: 33km/h). He has a monthly check-up at the local hospital but is otherwise in tip-top condition,” Monocle writes.
It’s this drive, this motivation and dedication to his craft that has kept Takeoka going. His tax payments and contributions to society have had a positive effect on the economy and the model is being applied to thousands of other senior citizens right across the country. Experts claim that this is a tack that should be applied more to Western countries like the United States. In fact, it is a measure that will have to be adopted to aid the increasing population and their expanding life expectancy.
“encouraging more people to enter the workforce, through offering flexible working practices”
According to Economics Help, an aging population could lead to a shortage of workers and hence push up wages causing wage inflation. Alternatively, “firms may have to respond by encouraging more people to enter the workforce, through offering flexible working practices” and it’s a question that needs to be answered now, not 10 years down the line.
It just goes to show that there will have to be fundamental changes made to society and how we live our lives to accommodate us all. As the global population increases, and life expectancy expands, it’s a no-brainer that the global workforce will have to adapt to accommodate this shift.