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We are at a crossroads in the evolution of retirement and the management of retirement benefits. Systems to support organized retirement have grown and prospered over the last 50 years, but today their future is uncertain. Anna has written about important issues for the retirement system. Her opinions and insights provide perspective as we move ahead to build the right scenario for our society:

It is very unclear whether general labor shortages will emerge. Neither individuals nor institutions should rely on expectations of future labor shortages as a way to create employment opportunities for older workers and to supplement retirement income. Anna’s opinion is that spot shortages are very likely, but future general shortages are uncertain.

Working longer will be important to many Americans, but individuals should not plan on the basis that will be an option available to them. Individuals who want to work longer need to be prepared on a contingency basis for labor force exit or partial exit relatively early due to disability, family needs or lack of an available job. Anna’s opinion is that individuals should position themselves for work options, but at the same time build resources in case they have no reasonable options.

Planning to “never retire” and using that as a basis for not building resources is a dangerous idea. For people who live to higher ages, a majority are unlikely to want, and in many cases be able, to work to very high ages. People need to have assets enabling some choice of retirement or at least major scaling down. Anna’s opinion is that age 75 or earlier is the practical limit of work for most people.

The public is not prepared to handle individual responsibility well, and education can solve at best less than half of that problem. Anna’s opinion is that retirement systems that work well without individual decisions are critical to having a society with a reasonable level of security in old age.

Demographics and economics as well as the desire for personal involvement in productive activities point to the desirability of later retirement and phased retirement. Disability and poor health point to the need to recognize that for about 10 percent of people, this is not a feasible reality.  Anna’s opinion is that enabling phased retirement, increasing general retirement ages, and maintaining strong disability systems is very good policy and good for all parties. All three are needed to work together, or they will not out work out well.

Anna’s opinion is that a good scenario for the future will be to: “Move to new patterns of retirement”  with the age at eligibility for full benefits under public systems indexed to increases in longevity starting from age 67, and with employers fully allowed to pay benefits under employer systems while people continue to work after age 62, with that age indexed in parallel with the full benefit retirement age under public systems.

Anna Rappaport Speaks Out