Annika Akerstrand plans to spend her 55th year on a boat on the Caribbean, as far away from the dark, frigid Swedish winter as her retirement savings will carry her.
“I want to retire when I’m still healthy enough to have some fun,” said Ms. Akerstrand, 45, as she unpacked boxes in her Stockholm gift shop. “My husband is 10 years older and when he is 65, we will do this together.”
Ms. Akerstrand’s hope for a retirement at 55 comes as Sweden appears to be headed in the opposite direction. With life expectancies on the rise, Swedish Prime Minister Fredrik Reinfeldt
The push for later retirements in Sweden, where people already work longer than anywhere else in the European Union, underscores a growing problem that threatens to paralyze the euro zone. Even as debt-strapped nations make deep and painful cuts in public spending, they are bracing for the parallel threat posed by a rapidly aging work force.
Though the problem looms throughout the developed world – including Canada, where the proportion of the population over the age of 60 is expected to rise to 32 per cent by 2050 – it is most pronounced in parts of Asia and Europe.
“Europe is not the only rapidly aging society in the world but it is the region that’s been aging for the longest period of time,” said Jorge Bravo, a section chief in the population division of the United Nations. “What affects population aging most is low fertility and most of the European countries started their fertility decline a long time ago.”
The size and speed of the demographic shift varies across countries and is expected to be particularly dramatic in Germany, Italy and Spain and in the former communist states of Eastern Europe. In each case, rising life spans and lower fertility levels will see the ranks of the elderly swell even as the working population shrinks.
To prevent a crippling burden on public welfare systems, policy makers are pushing for a variety of reforms designed to keep older workers on the job longer. In most cases, this has meant increases in official retirement ages: from 60 to 62 in France, for instance, and from 65 to 67 in Spain.
Compared to these reforms, Mr. Reinfeldt’s pitch for retirement at 75 seems “excessive,” said Asghar Zaidi, of the European Centre for Social Welfare Policy and Research in Vienna.
“But I would share his opinion that extending working life is the way to sustain pension systems. People can work longer, pay more contributions or receive less pension income. When people are given these options, an extension of working life is generally the most acceptable. No one wants a lower income or higher risk of poverty in old age.”
Sweden already leads the European Union when it comes to keeping older workers on the job. At 61 per cent, the country’s employment rate for those aged 60 to 64 is the highest in Europe and well above France at 17.9 per cent and Germany at 41 per cent.
The trouble is, the employment rate drops off dramatically at this point, to just 6.3 per cent of those over age 65, according to EU statistics. As life spans continue to grow, there are concerns that Sweden’s generous welfare state could face a particularly heavy burden from the growing number of retirees.
“Compared to a lot of other countries Sweden has come very far,” said Annika Sunden, deputy director at the Swedish Pensions Agency. “But we need to do more. We know that.”
