The French are up in arms over retiring at 64. How do other countries compare? | CNN Business

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CNN
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A nationwide strike in France to protest a rise in the retirement age drew more than a million people onto the streets on Thursday before ending in violent clashes with police in Paris and other cities.

The protest followed a strike of a similar magnitude in January and days of smaller walkouts and demonstrations in between. And more industrial action is planned for next week.

What’s making the French so angry is a new retirement age that will still be one of the lowest in the industrialized world.

Under a new law, pushed through parliament without a vote last week, the retirement age for most French workers will be raised from 62 to 64.

That will still keep France below the norm in Europe and in many other developed economies, where the age at which full pension benefits apply is 65 and is increasingly moving towards 67.

In the United States and the United Kingdom, the retirement age is between 66 and 67, depending on the year you were born. Current legislation envisages a further rise from 67 to 68 in Britain between 2044 and 2046 (although the timing of this increase is being reviewed and could change).

State pensions in France are also more generous than elsewhere. At nearly 14% of GDP in 2018, the country’s spending on state pensions is larger than in most other countries, according to the Organization for Economic Cooperation and Development.

The French government has defended the retirement reform — which includes other changes — as necessary to keep the pension system funded. Taxes on current workers pay for the benefits of retirees, and as people live longer and more baby boomers retire the system would otherwise eventually go bankrupt.

The financing of pension systems is a concern in many developed economies.

“Government agencies predict massive deficits in the coming years, as boomers continue to retire, and they need to make changes very quickly — otherwise they will lose money to invest in other things,” Renaud Foucart, a senior economics lecturer at Lancaster University in England, told CNN in January when the French plan was proposed.

Pension reform is “seen as taboo” in France, according to Foucart.