The question about retirement age pops up every now and then and it’s of course a can of worms that few politicians would like to open. Political strategists have always known that a sure-fire way to cause a drop in your support numbers is to suggest a higher retirement age.
In Finland this issue came up again as a side-effect in a strange political episode, in which Finance Minister Katri Kulmuni had to resign over €50k coaching bill. As she was resigning, Ms. Kulmuni (who is still leading the Centre Party) surprised everybody by hinting that the party would like to have a discussion about the retirement age.
Her successor as new Finance Minister, Matti Vanhanen (Centre Party), a political veteran who was Prime Minister from 2003 to 2010, famously got into trouble in 2009 when he wanted to ignite a political discussion about the retirement age claiming that he had got the idea while cross-country skiing in Lapland.
A lot has changed in 11 years and it’s fair to say that changes will continue to take place, especially in three areas that are critical when considering retirement age.
First, people are living longer thanks to improvements on many different fronts and it’s a safe bet that this development will continue. We’re not only talking about breakthroughs in science and technology but also about healthier habits and improved lifestyles in general. Many people now in their sixties look like people in their fifties in the 1950’s.
Second, when it comes to demographics, Finland is beginning to look an awful lot like Japan. Each year less babies are born. The balance between people who have retired and people who should be paying taxes and funding the system is way off.
Third, the nature of work and how we work are constantly changing. The COVID-19 crisis will just accelerate this change. We’re certainly going to see less commuting to over-crowded city centers and more working from home and flexibility in how work is arranged. Then there’s all the automation AI and Robotics will bring us. Fewer people will be performing dangerous or exhausting physical work. And it’s not just physical work, a lot of tedious and repetitive office work will also be automated away, allowing people to do more meaningful work instead.
Thanks to these fundamental changes, I think it’s realistic to assume that people will in fact want to have longer careers than what was customary for example in the 1970’s. More and more people will find it natural, even desirable, to work until they’re close to 70. That number could easily go up to 75 sooner than we think.
Therefore, political strategists might want to re-evaluate their strategies regarding the retirement age. At least in Finland people understand very well what’s been going on and where we’re headed. A question which 20 years ago was considered a political landmine could turn out to be a super smart thing to bring up in the near future.