The Worldwide Financial Fund (IMF) has ignited a worldwide debate on the age of retirement, which may evolve into us all having to work till we’re seventy or extra.
Their argument is that ’70 is the brand new 50’ because of improved well being and cognitive talents amongst older populations. In its report, ‘Rise of the Silver Financial system’, the IMF highlights that folks aged 70 in 2022 exhibit the identical cognitive perform as the typical 53-year-old in 2000, primarily based on surveys of 1 million people throughout 41 international locations. Assessments of reminiscence, orientation, and primary maths, alongside bodily assessments like grip power and lung perform, present that a mean 70-year-old at this time matches the health of a 56-year-old from 25 years in the past.
The IMF’s push to lift the retirement age comes from nervousness over the sustainability of the present pension techniques as rising life expectancy and falling start charges are altering our financial mannequin. These tendencies are rising the dependency ratio, or the variety of non-working people in a inhabitants, probably holding again financial development by decreasing labour market participation.
The retirement age in Spain at the moment ranges from 65 to 67 relying on how a lot in social safety contributions one has made , the IMF suggests not solely delaying retirement but in addition extending the pension calculation interval past the present 29 years. This might incorporate lower-earning years, decreasing pension payouts.
The IMF’s proposal runs in keeping with warnings from Spain’s Impartial Authority for Fiscal Accountability (AIReF), which predicts pension spending will attain 5.6 per cent of GDP in 2025. The ‘substitution impact’, the place new pensioners obtain greater advantages than these exiting the system because of dying, is predicted so as to add over €2 billion in prices. In March 2025, Spain’s social safety system spent €13.492 billion on pensions, a 6.3 per cent improve from the earlier yr, stretching public funds and ushering a potential future the place late retirement may develop into legislation, reasonably than a alternative.
Whereas selling longer working lives, the IMF ideas its hat to Spain’s latest initiatives encouraging delayed retirement, which lets staff proceed previous the authorized age for greater pensions. Alternatively, the IMF proposes international locations ought to bolster employment charges by modernised job intermediation providers, public-private partnerships, and insurance policies permitting unemployed people to work quickly whereas nonetheless receiving advantages. The measures, the IMF argues, may enhance labour provide and nationwide financial stability as a type of addressing the challenges of an ageing ‘silver financial system’.