Debate Over Debt Spurs Talk of Raising Retirement Age
As concerns mount over the growing U.S. debt from the so-called “One Big Beautiful Bill,” discussions are underway about how to finance the nation’s borrowing. Among the suggestions is increasing the retirement age, although that idea didn’t resonate as strongly in a recent Wall Street Breakfast poll from Seeking Alpha. Instead, participants leaned toward tax reform and significant reductions in government spending, which are seen as potentially offering quicker fiscal relief. Despite this, raising the retirement age remains a prominent topic in international discussions.
Denmark Sets a New Standard
Denmark recently approved a plan to gradually raise its retirement age to 70, the highest globally for receiving full pension benefits. The transition will occur in stages: age 68 by 2030, 69 by 2035, and finally 70 by 2040. The goal is to maintain the long-term viability of the pension system in the face of an aging population—a challenge many other countries are also confronting.
This policy shift builds on a 2006 Danish agreement that tied retirement age to life expectancy. While adjustments have been made over the years—sometimes amid public protests—this latest move may be the last for a while. Prime Minister Mette Frederiksen acknowledged the limitations of such changes, saying, “You can’t just keep saying that people have to work a year longer.”
U.S. Policy Outlook
In the United States, the retirement age has also been gradually increasing since reforms were enacted in 1983. By 2025, Americans born in 1960 will need to be 67 to receive full Social Security benefits. With Americans living longer and entitlement programs like Medicare proving difficult to reform, further increases in the retirement age could be considered as part of broader efforts to stabilize federal finances.