By Benedict Clements
Indiana Jones, the fictional character of the namesake movies, once said “It’s not the years, it’s the mileage.” This quote comes to mind as many advanced economies wrestle with pension reform and the best way to ensure both retirees and governments don’t go broke.
Our view, explained in a new study, is that the years do matter.
Our analysis shows that gradually raising retirement ages could help countries contain increases in pension spending and boost economic growth. Further cuts in pension benefits, or raising payroll contributions, are also options countries could consider, although many countries will find many advantages in raising retirement ages.
The challenge is to reform pension systems without hurting their ability to provide income security for the elderly and prevent old-age poverty. Continue reading
Filed under: Advanced Economies, Economic Crisis, Employment, Fiscal policy, IMF, International Monetary Fund, Public debt | Tagged: advanced economies, demographics, economic growth, fiscal policy, GDP, government debts, government deficits, IMF, Indiana Jones, International Monetary Fund, pension reform, pension spending, pensions, productivity, retirees, retirement, taxes | 3 Comments »