IF you are an Australian in your early fifties and starting to think, however fleetingly, about retirement, the future you thought you had just changed dramatically.
In an aside in Wayne Swan’s Budget speech he announced the retirement age would be lifted by two years, to 67. There can’t be much that the Treasurer has enjoyed about putting this frightful Budget together, but he might take some quiet consolation in remembering John Howard was that age when he was involuntarily retired as Prime Minister in November 2007.
Lifting the retirement age should come as a relief to younger workers. I love old people – I know some, and sometimes even talk to them. But having a general understanding that you stop paying taxes and start taking them instead at 65 years of age is both ageist and something the country cannot afford to continue.
People live longer now, so they draw the pension for longer, which costs younger people more money in tax. But put that aside – who doesn’t want to make sure our elders get a decent stipend to tide them over? No, the stupidest thing about having 65 as a magic line benchmark for old age is that many people that age are sharp-witted, useful, and often fit as fiddles. You don’t turn 65 and suddenly need a walking stick for your birthday.
The Budget papers have a nice bit of demographic detail:
When the Age Pension was introduced in 1909, around half the male population reached retirement age. Today, over 85 per cent of the male population reach retirement age and can expect to spend more than 7 years longer in retirement. At the same time, the number of working-age people to support every person aged 65 years and over is expected to more than halve over the next 40 years. This presents a major challenge to the long-term sustainability of the pension system.
Translation: The country will go broke because we’ll have too many people drawing the pension and not enough people paying tax.
It all starts in 2017, when the retirement age will rise to 65 and a half. Every two years the retirement age will be pushed back six months until it stops at 67, in 2023.
Just as the Treasurer might take a little bit of pleasure from it, any Gen Xer like me, or even a Gen Y (if u cud like, OMG, take like, the iPod off for just one second) can look at it and take some comfort in knowing someone is planning for our futures, too.
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