Putin’s Russian Retirement Age Hike And U.S. Social Security
Op-Ed by Elizabeth Bauer
In the news yesterday: despite public protests on the matter, Russian President Vladimir Putin signed into law a pension reform bill which increases the retirement age, formerly age 55 for women and 60 for men, to age 60 and 65, respectively. (See Radio Free Europe for coverage.)
From an American point of view, one might be surprised that the retirement age was ever this low in the first place, or that retirement ages were and still remain different for men and women. (This is not unusual, as I wrote back in March.) One might have even a bit of sympathy for Russian men, though, whose life expectancy is a mere 66 years; the Independent(UK) reports that 40% of men will not live to retirement age under the new law.
But here’s something else readers might not notice: there is no early retirement option available to Russian retirees. In fact, the Moscow Times reports that the government attempted to mitigate concerns over livelihood in those pre-retirement years by criminalizing the firing of workers in the five years preceding retirement.
In contrast, American workers in the years prior to normal retirement age who exhaust their unemployment benefits, or those who consider themselves likely to die young because of family history or their own poor health, are likely to simply start receiving Social Security benefits with the early retirement penalties. In fact, our system, despite the official “full retirement age” of 67 for by now most workers, actually provides “full” or maximum benefits at age 70, with reductions or de facto reductions for benefit commencement prior to that age — a provision that’s either a bug or a feature, depending on your perspective: it provides greater flexibility but at a cost in lost benefits that may create financial hardship down the road.
Read more @Forbes