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Lawrence Solomon: Here’s a retirement plan — don’t

Lawrence Solomon | March 13, 2015
FotoliaToday pensions are too-often pogey, payments available two decades before we’re expected to die, and when we’re fitter than ever, and better able to work than ever.

Those who retired at 55 were 89% likelier to die within 10 years of retirement than those who retired at 65

Governments and think tanks are scrambling these days to fix our public and private pension systems, whether by plugging gaps that they see for certain demographics or by giving all of us more income to retire on.

They should instead be asking why we need pension systems at all. Pensions for workers are retrograde ideas, barely a century old in the English speaking world, that have outlived their purpose, if they ever had a valid one at all. Instead of incenting us to retire, we should be incented to keep working. We’ll live longer and better, and we’ll make the world a better place, too.

A 2005 study published in the British Medical Journal that compared all Shell Oil employees in the U.S. who retired at age 55 and at age 65 shows how dubious the supposed ideal of early retirement can be. As one example, those who retired at 55 were 89% likelier to die within 10 years of retirement than those who retired at 65, although this may be explained in part because people retired early for health reasons. To correct for that possibility, the authors among other corrective measures then looked at those who retired at 55 and were still alive at 65. They also had shorter life expectancies than those who retired at age 65.

Those in the managerial and professional occupations at Shell suffered least by early retirement while those in skilled, semi-skilled, unskilled and clerical positions suffered most — they were 17% likelier to die young. But everyone gained by continuing to work. “Mortality improved with increasing age at retirement for people from both high and low socioeconomic groups,” the study found.

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