Pension Problems?

There is a problem facing the world's largest economies. That problem is guaranteed pensions. It is projected that the United States, Europe and Japan will have over 1/3 of their combined population over 60 years old by 2040.

People are living longer and therefore spending a greater amount on every day expenses to live. Health care costs alone are currently $5300 per person each year and are expected to rise to over $10,000 per person yearly in the next 10 years.

What happens to the economies of the United States, Japan and Europe if 1/3 of the population that is able to work is not working but rather consuming? It will put a tremendous strain on the economies of each of these countries if expectations are not altered. Companies will have trouble paying pensions as obligations continue to grow and asset growth cannot keep up. The governments will not be able to meet social security and medicare obligations.

Is there a solution? Yes. Don't retire or retire later. Most of these problems would be solved if the average retirement age is increased to age 75. We will see the social security and medicare ages increased to age 70 very soon. The United States cannot afford to have a majority of its citizens consuming and not producing. One of the trends that I am most excited to see is the trend of people working and being productive well after 60 years old.

I had a conversation with my dad about this yesterday. He is still working daily for the Nuclear Regulatory Commission as a nuclear physicist at age 65 despite having quadruple bypass heart surgery this year. He is able financially to retire but chooses to work. I have a client who is a doctor still seeing patients daily at age 71. Another client runs his Plastics company daily at age 75. Each of these live purposeful; less stressful lives (my dad's heart problems were not related to job stress).

The retirement of the future needs to look different. Life is a growing experience. Travel, learning, purposeful work, serving others and leaving a legacy are the things that make life rich. I see more people over age 60 choosing to take a few years off from work and then launching another career or starting a business. Or working part-time as they mix goals of travel and spending more time with family. We need less emphasis on pursuing leisure and more emphasis on pursuing purpose.

There is only one example in the Bible of someone retiring in the traditional sense- the Levitical priests who retired at age 50- Numbers 8:25. But these priests were then expected to mentor younger priests. Jesus tells us, "We must do the works of Him who sent Me while it is day; night is coming when no man can work." John 9:4. As Christians, we should strive to be productive and serving until the day the Lord calls us home. This may or may not mean working for income.

For those who choose to work for income and continue to produce, I believe you are doing a good thing for society. The greater sacrifices we can make for the common good; the better futures will be in store for our children and grandchildren.

For His Glory,

Ashley Hodge