As Denmark raises its retirement age to 70, experts weigh in on whether US may follow its lead
Lorie Konish
Copenhagen: Denmark has moved to increase its retirement age to 70 — making it the highest retirement age in Europe. Yet it may be difficult for the U.S. to follow its lead.
The new change in Denmark will apply to public pension retirements starting in 2040. Since 2006, the country has been adjusting its retirement age to reflect changes in life expectancy.
The US does not technically have an official retirement age. At age 65, individuals become eligible for Medicare coverage. At age 66 to 67, depending on date of birth, an individual becomes eligible for full Social Security benefits based on their earnings record.
However, those individuals who wait until age 70 to claim Social Security retirement benefits stand to get the biggest payout — an increase of 8% for each year beyond full retirement age. (The full retirement age is when beneficiaries are eligible for 100% of the benefits they’ve earned based on their work records.)
Yet few people wait until age 70 to claim benefits. While more than 90% of individuals would benefit from delaying Social Security until that age, only about 10% actually do, according to a 2023 paper from the National Bureau of Economic Research.
While age 70 is not the official US retirement age, it is the threshold based on economists’ definition — the age at which you can’t accrue any more benefits, according to Teresa Ghilarducci, a labor economist and professor at The New School for Social Research.
“In the United States, it’s been 70 for decades, and we had the highest retirement age than any other country for years,” Ghilarducci said.
The US does not have a true retirement age, said Andrew Biggs, senior fellow at the American Enterprise Institute. Private pensions, including defined benefit plans and 401(k)s, allow individuals who work longer to increase their nest eggs. Social Security benefits do not have one single retirement age, instead offering a “sliding scale between ages 62 and 70 in which benefits increase the older you choose to retire,” he said.
In 1983, Congress passed legislation to gradually raise the full retirement age for Social Security from 65 to 67. That change is still getting phased in today, with people born in 1960 and later subject to the higher 67 retirement age.
In December, an amendment to raise the full retirement age to 70 was introduced by Sen. Rand Paul, R-Ky., during last-minute efforts to advance legislation that increased Social Security benefits for certain public pensioners.
The bill, the Social Security Fairness Act, was voted into law. However, the proposal to raise the retirement age was struck down.
Paul called for raising the retirement age by three months per year until it reached age 70, to reflect current life expectancies. The change would have created nearly $400 billion in savings for the program, while the Social Security Fairness Act added $200 billion in costs to the program over 10 years.
Other Republican proposals have likewise called for raising the retirement age.
The Social Security Administration faces looming depletion dates for the trust funds it relies on to help pay benefits. To help resolve that issue, lawmakers may consider raising taxes, cutting benefits or a combination of both. Raising the retirement age is effectively a benefit cut.
Like the changes enacted in 1983, raising the retirement age could be on the menu.
