European Nations Have No Choice but to Raise Retirement Ages

Investment Analysis Clubs Macro Economic Trends and Risks
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Europe’s population is aging. The birth rate is declining. Life expectancy is growing ever longer. Fewer people are contributing to fund public systems that will have more people drawing money from them for longer periods of time. At the same time, technological disruption is reducing the share of labour income in gross domestic product.

*Since most of Europe’s pay-as-you-go systems were designed when demographics were entirely different, they must be adjusted to reflect the current reality. *

Pension reforms keep failing because the politics overrules the economics.

“Relax tj. The European nations will figure it out.”

I dunno they have been dithering for 3 1/2 years and counting.

European pension systems are slowly rolling toward a breaking point — and no one seems to have the answer to how to fix it.

The root cause is an aging population, characterized by fewer births and longer life expectancy. This increases the so-called old age dependency ratio, whereby a growing share of an ever-grayer population’s pension payments rests on a shrinking labor force.

In some countries, like Germany, that ratio is already high, at 40 percent. But by 2050, that ratio will be even more extreme, topping 75 percent in the cases of Italy, Spain and Greece. It’s projected to grow to above 50 percent in most EU countries, including in relatively rich places like the Nordics and the Netherlands.

The longer the solution is put off; the more severe will be the solution.

And Americans shouldn’t gloat.

https://www.ssa.gov/OACT/solvency/
Trustees Reports since 2012 have indicated that Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) Trust Fund reserves would become depleted between 2033 and 2035 under the intermediate set of assumptions provided in each report. If no legislative change is enacted, scheduled tax revenues will be sufficient to pay only about three-fourths of the scheduled benefits after trust fund reserve depletion.

https://www.npr.org/2025/06/18/nx-s1-5436828/social-security-benefits-cut-congress
Social Security benefits face big cuts in 2033, unless Congress acts

June 18, 202512:00 PM ET

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They do have a choice (actually, choices).

They can allow for increased immigration. They can also increase taxes.

Neither of those may be attractive alternatives but then neither is necessarily working longer.

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Smart effective governance is extremely difficult to achieve and preserve because (as Aristotle and other ancient sages pointed out long long ago) anarchy, stupidity, absolutist and oligarchic enslavement leading to rebellion always lurk.

Smart effective governance requires consistently intelligent moderate practice of the political arts of discussion and compromise, leading to long term consistent policies capable of withstanding shocks and emergency.

Reality now has us in the woodshed for some corporal lessons. I hope learning happens quickly because stoopidness is extremely costly and makes reforms far far harder.

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Likely not an attractive option to the European population as they have an ongoing migrant/refugee crisis.

Most European nations are in the process of expelling the refugees back from whence they came. They don’t have the education or language skills to aid European economies. And with the rightward shift in European voting; politicians are responding to that phenmenon

.

Yeah not popular over there or here.

Politician mantra:“Delay, Delay, Delay–until I’m out of office” :smirking_face:

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Bingo. I’m under no delusion, at 58 in the tech world, that if I lose this job I’m very likely not finding another one. At 55, when I got my current job, I never had anything as close as this difficult a task in getting a job offer. Even at 49, I interviewed, I got job offers. This time around I batted 1-for-7.

Work longer. Ha!

Add to that, I work in an industry that keeps telling us they are going to remove human labor in very large numbers.

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I remember an IT guy on the old boards was retained as he had knowledge of old languages & systems. The new guys had zip knowledge of the “old” stuff.
I suppose those jobs may be hard to find though.

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Ageism is a thing, especially in tech. If you retire early you have to keep in mind there might not be any going back if you change your mind.

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You might not get a job but you can always become independent. At 52 I could not get a job so I partnered with a Kiwi I met online. He was a terrific designer but clueless about code. I stink at design but am well versed in Apple’s Human Interface Guidelines. We had customers on several continents.

I had a customer in Chicago who was very happy to run his business on an iPhone poolside in Florida. This is what’s left of my marina’s website:

The Captain

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It’s a thing everywhere. That’s at least partially why you see older people working in Walmart, or hardware stores, or security, similar “simple” jobs. Some just want to keep busy, but many can’t get anything else.

I knew an older lady who was a security guard at my company. It wasn’t that she wanted to keep busy, she needed that job. Very kind old lady who wouldn’t hurt a fly even if she were able (which she wasn’t). She asked me about stocks from time to time. She was very proud when she opened a brokerage account and bought -IIRC- 5 shares of our company stock. That’s all she could afford.

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