Given the recent economic crisis in places like Greece and Italy, it's difficult to believe that the retirement age of workers in these countries is low. Turkey, for example, used to have a retirement age of 60 until the government abolished it and changed it to 25 years of contributions, meaning that depending on the age they entered the workforce, men and women would be eligible to retire based on the years they contributed to their retirement plan. The Organization for Economic Co-operation and Development (OECD) calculated that workers who made contributions for 25 years and started working at age 20 would be able to retire at 45. Greece closely follows Turkey in retirement age. In Greece the retirement age is 57 up from 55 in 1959. In Italy the age is 59, but will increase to 65 by 2030.
SEE: 5 Ways To Fund Your Retirement
Despite having low retirement ages, these countries have not been able to handle the economic strain the increasingly older population is placing on their government pension plans. This is demonstrated by their increasing retirement ages. Turkey has been struggling for years to keep up with its pension plan payouts. In 2008, the government was confronting a system that ate up 17% of its budget. Payments for the 12 years leading up to 2006 totaled 119% of that year's gross domestic product. Its early retirement age was threatening to bankrupt the country unless lawmakers decided to make a change. Social security was consuming almost 4% of gross national product. According to the OECD, this figure is forecasts to increase to 6% by 2045 if there are no changes.
In 2010, The United States Social Security Administration stated in their "Social Security Programs Throughout The World" report that as of 2036, Turkey's retirement age will rise gradually to age 65 by 2046 (men) and 2048 (women). This would allow pensions to accumulate more slowly.
National Retirement Age
Few countries now have a national retirement age of 60, including Belgium, Hungary, Korea and Luxembourg. France's current retirement age is 60.5. Given the increased life expectancy rates, many workers will have to wait longer to reach retirement. According to the OECD, to accommodate the growing old population, many countries are increasing their pensionable age.
The U.S. currently has the third highest retirement age: 66 and will increase to 67 by 2022. Iceland and Norway have the oldest 2010 retirement age of 67. Denmark will be gradually rising its retirement age to 67 by 2028. In the U.S., workers can start receiving social security retirement benefits at the age of 62 but at a lesser amount. However, the United Kingdom is currently projected to overtake all other countries by 2047 with a retirement age of 68. According to the OECD, the pensionable age will reach 65 for both sexes by 2020.
The Bottom Line
Due to the economic strain life expectancy rates are placing on countries, governments around the world are encouraging people to work longer. Some countries are even placing strict qualifying conditions on workers who want early retirement. Early retirement seekers get fewer pensions while a larger payout is given to workers who stay in the workforce longer. Some countries are even taking the retirement age limit further. For more on retirement, check out The New Retirement Age.