Deciding to retire early, just before I turned 50, certainly makes me a bit counter-cultural in terms of expectations for how long one works. I have estimated before that only about 1 in 20 workers (5%) in the United States retire at 50, and the average age of retirement is sixty five.
Since we are traveling right now in Japan (I am writing this on a 200 MPH train between Tokyo & Kyoto), I was interested in sharing this Bloomberg article published yesterday in the the International Japan Times titled “Sixty Seen As Too Young To Retire In Aging Japan”.
The article starts by telling the story of Hiroshi Suzuki, who initially retired at age 65, went back to work almost immediately (he’s now 72) and thinks that ““People in their 70s can still work” and that “there’s no need to think about retiring until you turn 80.” The article goes on to say that “Japan’s demographic reality is so extreme that even though it has the highest proportion of working seniors among developed countries, it’s not nearly enough to stem the labor shortage.”
The outlook over the next 20 years is even worse with another with another 5% of workers aging past 65. “To avoid such a shortage, the country needs to come up with more innovative policies to pull seniors into the workforce.”
Since the Japanese have one of the longest lifespans of any developed country, perhaps this attitude isn’t surprising. “People in Japan have long, healthy lives, and laws and company policies in the country have not kept up in terms of making use of their longevity,” says a professor quoted in the article ,“Age 60 is still very, very young in Japan. If you want to tackle this issue you can’t just have people work longer, you need to rethink the whole HR system in Japan.”
About 81 percent of Japanese companies still set the retirement age at 60. Because raises are often tied to seniority, companies historically have encouraged people to retire at that age. Curiously, in April 2013 the Japanese government changed employment rules “to require employers to keep on all workers who want to stay until age 65” but under a policy that allows them to pay a lower wage — “often a much lower wage.” On average, 27% less!
Isn’t that a bit strange to read? That Japanese companies are permitted (even encouraged) to actively discriminate against older workers by paying them less? Isn’t it strange that the society would accept the idea that your wages should be less when you are between ages 60-65? World travel always challenges your thinking about what is right and wrong in this world, but frankly I am a bit shocked at these Japanese government labor policies. They really run against the grain of what people would think is acceptable in the United States.
One of the most interesting aspects of world travel is how it challenges your notions about how society ‘should’ operate. In learning about other countries and the choices they make, using different cultural, economic, and legal frameworks, you open your mind to new ways of thinking. The differences highlighted in this article – that it is good to work into your late 70s because society needs you, but it is OK to pay older workers less – aren’t differences I would particularly subscribe to, but were interesting to read about.
What cross-cultural differences about early retirement have you seen (or read about) in different parts of the world?
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