Mikio Fukushima, who is 52 and lives in Tokyo, worries that he might need to move somewhere cheaper, maybe Malaysia, after age 70 to get by comfortably on income from his investments and a public pension of just $10,000 a year.
People like Fukushima who are fretting over their retirement prospects stand in contrast to many who are already retired. Many workers were recipients of generous corporate pensions and government benefits that had yet to be cut.
Jean-Pierre Bigand, 66, retired Sept. 1, in time to enjoy all the perks of a retirement system in France that’s now in peril. Bigand lives in the countryside outside the city of Rouen in Normandy. He has a second home in Provence. He’s just taken a vacation on Oleron Island off the Atlantic coast and is planning a five-week trip to Guadeloupe.
“Travel is our biggest expense,” he said.
The notion of extended, leisurely retirements is relatively new. Germany established the world’s first widely available state pension system in 1889. The United States introduced Social Security in 1935. In the prosperous years after World War II, governments expanded pensions. In addition, companies began to offer pensions that paid employees a guaranteed amount each month in retirement — so-called defined-benefit pensions.
The average age at which men could retire with full government pension benefits fell from 64.3 years in 1949 to 62.4 years in 1999 in the relatively wealthy countries that belong to the Organization for Economic Cooperation and Development.
“That was the Golden Age,” Mercer consultant Dreger says.
It would not last. As the 2000s dawned, governments — and companies — looked at actuarial tables and birth rates and realized they couldn’t afford the pensions they’d promised.
The average man in 30 countries the OECD surveyed will live 19 years after retirement. That’s up from 13 years in 1958, when many countries were devising their generous pension plans.