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Retired? Eligible for Social Security? Doesn’t Mean You’re Done.

By Karen and Erica

France’s population is rebelling at the prospect of raising the retirement ag,e from 62 to 64. Some in this country are also rebelling, at raising the retirement age from 62 to 65. 

Not everyone objects, of course. At least for some industries, where physical labor is not a large component of how people work, the age at which people can reasonably be expected to remain healthy is much older, and therefore mandating retirement while people are going strong makes no sense. Bernard Arnault is of that view. As to succession plans for his company, LVMH:

Mr. Arnault has given no indication whom he will choose as his successor, saying only that it will be based on merit. When asked about the matter in January at a presentation of LVMH’s annual results, he drew a parallel between his recent decision to raise the retirement age of LVMH’s chairman and CEO to 80 and French President Emmanuel Macron’s contentious push to raise France’s retirement age to 64.

“As to succession, you may also have noticed that the retirement age—which is very much in vogue—has been extended,” he said.

We agree. Indeed, maybe there should not be one. Nevertheless, the retirement age seems to be in play. But the debate is getting confused. Many are muddling concerns about eligibility for benefits, and the increasing costs of those benefits as a result of the aging of Baby Boomers, with the question of when people should retire. 

These questions have different answers. We will allow others more qualified than we to address economic imperatives created by the numbers of people expected to access Social Security—though we note that if we were not forced to retire then we could continue to contribute to the economy. Our concern is that retirement not be mandated simply because a worker reaches the benefits age. That gets things backward, to the detriment of everyone.

Here are our thoughts:

  • When German Chancellor Bismarck created the forerunner of Social Security, he set the eligibility age at 70–even though life expectancy was then 40. Bismarck’s idea was that some form of safety net should be set for people who could no longer work to support themselves. The same idea was the motivating force behind Social Security in the U.S. which, when it was established in 1935, set eligibility at 65, even though most people did not live that long. Given the relationship belween eligibility and life expectancy, it seems that neither idea was really intended to create a retirement benefit, since most people would never earn it. Rather, society wanted to ensure people would not starve because they could no longer work—if they managed to survive.

  • Then, in the 1950s, retirement was invented. In the U.S., men, mostly, who had worked for decades, often in physically challenging environments, became entitled to benefits a few years before their lives were expected to end, and with their wives got into their new cars and travelled on the nation's new highway systems to new retirement communities like Sun City where they could play golf and relax for a few years.

  • Now, of course, everything is different. We are on the leading edge of the millions of women who joined the workforce in the late 1960s and early 1970s. We are now retiring after decades of work. Many of us did not work in physically challenging jobs. All of us have benefitted from health improvements in the 1950s, so we are living longer, healthier lives (though COVID has had an impact on life expectancy.) 

  • Some of us want to retire and stop working–-especially those in less rewarding jobs. Some of us—in every country—have lost our jobs and are no longer employable, partly due to ageism. People in these positions need to be able to draw on the benefits they have paid for. 

  • Some of us do not want to retire from the working world—though we may have lost interest in working at our old jobs, or 24/7. We do not visualize ourselves in rocking chairs for the next three decades. That we have reached the age of eligibility for Social Security should not dictate that we be required to sit down. 

So let’s not muddle things. Social Security is a fund we all pay into while we work. We should all be able to draw from that fund after we have worked for a certain number of years and have reached a certain age. But concluding that we can no longer be productive–-indeed that we can no longer be allowed to be productive–-once we trigger those criteria squanders a vital social asset—our experience.

If we need to take steps to ensure the Social Security fund stays healthy, let’s do that. But let’s not carelessly waste the productivity of the people who know the most by failing to understand that reaching the age of eligibility for retirement or Social Security has nothing to do with our ability to be productive.