ASIA: As people live longer, many countries are raising the retirement age to address the challenges of an ageing population. The main reasons for this change are the strain on pension providers, increasing life expectancy, and a shrinking workforce.
In some nations, the situation is even more critical. Japan and South Korea are classified as super-aged societies, meaning over 20% of their population is 65 and older. This demographic shift puts extreme pressure on pension systems and healthcare services.
Why raise the retirement age?
Many governments are struggling to keep pension systems financially viable. With fewer young workers paying taxes and more elderly people relying on pensions, funds are running low. Raising the retirement age helps reduce this financial burden and ensures that pension systems remain sustainable.
Low birth rates worsen the problem. In countries like Japan and South Korea, fewer young people enter the workforce, leading to labour shortages and higher dependency on social welfare. Without changes to the retirement system, governments may struggle to provide for their ageing populations.
Increased life expectancy also means that people remain healthy for longer. Many older adults can still work and contribute to the economy. Keeping experienced workers in jobs benefits businesses and prevents a shortage of skilled labour. This also helps transition workers better so that by the time experienced workers retire, the newer workforce can handle their jobs better.
Challenges for older workers
However, not everyone can work longer. Some jobs are physically demanding, and older workers may have health problems. Raising the retirement age without supporting these workers may create unfair situations.
Age discrimination is another concern. Some employers prefer hiring younger workers, making it harder for older individuals to find jobs. They may struggle financially if they cannot work but are too young to retire.
This opens a discussion on how governments should navigate these policy shifts. These changes should be scrutinized to avoid disastrous consequences such as widening income inequality, increased elderly poverty, and rising unemployment among older workers.
Many older workers may find themselves in difficult situations if governments raise the retirement age without proper support systems. They may be forced to continue working despite health issues or left without income because they cannot find employment.
How countries are responding
To address these challenges, governments are introducing flexible retirement options. Some countries allow people to reduce their working hours before fully retiring. Others provide training programmes to help older workers adapt to new roles.
Countries like the Philippines, Singapore, Indonesia, and China have adjusted the retirement age for specific industries, recognising that different jobs require different policies. South Korea is also considering similar steps. These measures help balance financial needs with fairness for workers.
A changing workforce dynamic
Raising the retirement age is a necessary response to an ageing population, but it must be done carefully. With birth rates falling and life expectancy rising, governments must find solutions that ensure pension systems remain sustainable while protecting older workers. By providing flexible options and support for workers in demanding jobs, governments can create a system that benefits both the economy and individuals.
In a society that promotes lifelong learning and adaptability, older workers can continue contributing meaningfully to the economy while also enjoying a dignified and financially secure retirement. This balanced approach is key to creating a sustainable future for all generations.
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