German think tanks say retirement age eventually will have to rise to 70

BERLIN (AP) — Germans are famous for being hard workers — but retirement at 70?

That's the prescription of two think tanks, which say years more toil are inevitable due to stubbornly low birthrates and the ballooning costs of the cradle-to-grave welfare system in a country that already has decided to bump up the retirement age from 65 to 67.

Germans already feel like the workhorses of Europe and fumed at the idea of footing the retirement bill for profligate Greeks. It's not clear if they would stand for three more years on the job, but without an influx of highly skilled immigrants, they may have no choice.

"If we look at the higher life expectancy and the shrinking birth rate in Germany, retirement age 70 will have to be introduced over time," Michael Huether, chief of the conservative IW, told the daily Rheinische Post.

The proposal echoes a similar assessment by the European Commission which said last month that the 27 member states need to hike their retirement ages to 70 by 2060. The topic is on the agenda everywhere in Europe, but no country is planning to go beyond 68 at this point.

Klaus Zimmermann of the liberal DIW told the Handelsblatt daily that "raising the life work time to 70 years is the most humane way to deal with the challenge."

Many Germans bristle at the idea of working more years.

"I'm already worn out now — how do they expect us to work several years longer?" asked Norbert Schmittbauer, a 50-year-old construction worker in Berlin.

"My body hurts so much and I start working every day at five in the morning," Schmittbauer said. His assessment of the think tank proposal: "Insane."

Many critics agree, adding that there are also too few jobs for the elderly, leaving them no choice but to retire early.

That trend is also hitting the United States, where more people decided to retire early and file for Social Security benefits in 2009 — 2.74 million — than any year in history, due to a slumping job market.

The German group VdK which is lobbying for retirees' interests said Wednesday only about one-fifth of those unemployed at age 60 or above currently ever find a job again, and only every second business in Germany even employs anyone above the age of 50.

VdK chief Ulrike Mascher said in a statement the idea to push retirement back even further to 70 is "utopian." She added that a quarter of German employees aged 55 to 59 need to retire early because they are too sick to work.

Benjamin Ladiges, a 32-year-old Berlin lawyer, said that while some jobs allow later retirement, professions with physical strains should be exempted.

"For some professions, especially desk jobs, it may make sense to push the retirement age, for others it, especially physical work, it is not an option," he said.

The debate is complicated by the fact that Germany's shrinking work force means the nation will face an increasingly acute shortage of skilled labor in some sectors — despite generally strong resistance in the nation to higher immigration.

The suggestion of retirement at 70 has fired up an already fierce debate about an unpopular law, passed in 2007, to raise the retirement age from 65 to 67 from 2012 through 2029.

The Social Democrats, then part of the government coalition, backed the law at the time, but took a beating from their constituency for it in the 2009 general election and have since raised questions about sticking with the plan.

The government has defended the law saying the job market for the elderly is improving. But Economy Minister Rainer Bruederle has made it clear there are currently no plans to go beyond 67.

Raising the retirement age for full benefits to above 67 is also being floated in the United States, along with a small cut in benefits, a slight increase in payroll taxes, or subjecting more income to taxes. House Democratic Leader Steny Hoyer suggested raising the retirement age recently, and Republican leader John Boehner said it maybe should go to as high as 70. The notion was immediately attacked by Speaker Nancy Pelosi, also a Democrat.

Doing nothing would require about a 25 percent cut in benefits for U.S. retirees a couple of decades from now.

All of Europe is facing the same trend of aging populations. While there are currently four people working for each retiree, projections indicate that by 2060 on average there will be only two.

However, responses to the politically hot topic have been very diverse across the 27 member bloc, and retirement ages are not at all uniform.

While the French government has struggled to raise the retirement age from 60 to 62, the British government is talking about plans to go for 68 by 2040. Currently Britain lets women retire at 60 and men at 65, as do Poland and Italy.

Spain and the Netherlands have debated raising their retirement ages from 65 to 67, whereas Portugal and Denmark want to stick with 65 for the time being.

Sweden has a flexible retirement age which allows people to retire as early as 61, but as late as 67. The Christian Democratic party, a small member of the governing coalition, has proposed allowing the window to be kept open until 70, arguing that it is important for the nation's future development.

"But it is also necessary that the elderly get more space to elaborate themselves with a flexible pension age, have the opportunity to scale down successively, the possibility to change jobs and start up their own businesses," the party has said.


AP writers Kirsten Grieshaber in Berlin, Malin Rising in Stockholm, Sweden, Stephen Ohlemacher in Washington, DC and AP correspondents across Europe contributed to this report.