Pension reforms are needed, but without systems to support continued hiring, development and … More
Last week, Denmark passed legislation to raise its retirement age to 70 in 2040, positioning the country to have the highest statutory pension eligibility worldwide. But Denmark is not alone. Many other countries in Europe and Asia are making similar moves in response to demographic shifts.
The OECD projects that by 2060, the average retirement age in the EU will approach 67, with several countries expected to reach age 70 or more. However, pension reform is only a partial solution. Without protections for older workers, systemic ageism will continue to reduce employment opportunities–risking increased unemployment and poverty.
Why the Retirement Age is Rising
Governments are responding to increasing longevity and declining birth rates. This demographic duo produces older populations and shrinks the labor force, pressuring the sustainability of pension systems designed for shorter lives and larger labor pools.
The OECD projects that age-related spending could increase by 6.5 percentage points of GDP between 2021 and 2060. Few governments can sustain multi-decade retirements on a mass scale. As it is, many pensions are inadequate to support independent living.
In 2022, the EU had nearly 30 working-age people (20 to 64) for every 10 people aged 65 or older. By 2045, the ratio is expected to drop below 20 for every 10.
In China, the retirement age is one of the lowest: 60 for men, 55 for white-collar women and 50 for women in factories. Yet, China’s National Health Commission projects that the over-60 population will grow from 280 million in 2022 to more than 400 million by 2035. A decade ago, 10 workers supported each retiree. Today, it’s only five. By 2050, it may only be two.
Even the U.S. has discussed the possibility of increasing the age for full social security benefits from 67 to 70. However, raising the retirement age creates additional economic challenges. For pension reform to be successful, it requires parallel employment policy reform.
The Risk of Retirement Reform in Isolation
Pension reforms are needed. But without systems to support continued hiring, development and retention of older workers, economic insecurity for older workers only increases.
Older workers face systemic employment barriers. A 2022 study by the National Bureau of Economic Research revealed workplace age discrimination as a leading indicator of financial instability and heightened poverty risk. Once unemployed, older workers struggle to find re-employment for months or years–often without success.
Millions lack retirement savings. The Pew Charitable Trusts reports that in the U.S., as many as 56 million private sector workers lack an employer-sponsored retirement plan. One in five people over 50 have no savings at all. Almost 40% worry about meeting basic living costs such as food and housing. For these people, working indefinitely is the only option for financial security.
The consequences of extended unemployment include rising homelessness. The 2024 Annual Homelessness Assessment Report to Congress reported that one in every five people experiencing homelessness was aged 55 or older, with more than 104,000 people experiencing homelessness between the ages of 55 and 64. Another 42,150 people were 65 or older. The report noted that “nearly half of adults aged 55 or older (46%) were experiencing unsheltered homelessness in places not meant for human habitation.”
Homelessness becomes a discriminating factor because most employers refuse to hire people who do not have permanent residence. Once homeless, people find it challenging to re-home, leading to a cycle of chronic homelessness.
How Countries Are Responding
Some countries are already pairing reform with protective policies, usually falling into one or more of the following four categories:
- Legal Protections Against Age Discrimination
- OECD guidance suggests removing mandatory retirement and strengthening employment protections for older workers.
- Ireland has proposed a bill that prevents employers from setting a compulsory retirement age below the state pension age (currently 66) unless the employee consents or there is an objective justification.
2. Flexible Retirement and Work Arrangements
- Many EU member states have introduced flexible retirement options, enabling individuals to transition to retirement or part-time work gradually.
- Belgium introduced a pension bonus for those working beyond retirement age and offers special allowances for those in stressful jobs.
- Sweden’s partial pension system allows workers to reduce their working hours and receive a partial pension from age 61.
3. Targeted Support and Training
- OECD countries are focusing on upskilling and reskilling older workers to improve their employability, providing targeted assistance for those at risk of long-term unemployment.
- Some countries ensure that the needs of older workers are systematically addressed in collective bargaining, including age-appropriate training and redeployment within organizations.
4. Income Support for Vulnerable Older Workers
- The Institute for Fiscal Studies in the U.K. recommends targeted increases in means-tested benefits (i.e., Universal Credit) for those just below the state pension age, especially those with health problems.
- Japan offers increased pension benefits for those who continue working past 65, aiming to leverage the skills and experience of older workers while reducing pension costs.
- The OECD also recommends maintaining access to unemployment and disability benefits for older workers, with careful monitoring to avoid incentivizing early retirement for those still able to work.
Denmark, Netherlands, Germany and the U.K. are notable for integrating flexible retirement options, retraining, and robust legal protections as they raise the retirement age.
The U.S. at a Crossroads
The U.S. has foundational protections for older workers through the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act; however, these laws have limitations, particularly in enforcement and the burden of proof. Despite numerous legislative proposals to strengthen protections (like POWADA), legislation has stalled in committees for years. As a result, age discrimination remains widespread, and older workers—especially those in their 50s and 60s—face significant barriers to employment, increasing the risk of poverty as retirement ages rise.
Since the Trump administration has begun slashing government funding, protections for older workers are disappearing. For example, the Senior Community Service Employment Program (SCSEP), the only federal job training program specifically for low-income seniors, is currently facing complete defunding in 2026. The SCSEP specifically provides job training, reskilling and part-time employment opportunities for low-income, unemployed individuals aged 55 and older.
A 2025 report ranks U.S. states from best to worst for older workers. Leading the way are Washington, New Hampshire, Alaska, Maryland and Colorado. These states offer strong labor markets, pay transparency, remote work opportunities, and higher median incomes for seniors. They also provide additional protections and workforce development initiatives that help older workers remain employed.
The worst states for older workers include Mississippi, Arkansas, Alabama, West Virginia and Kentucky. These states tended to have higher rates of age discrimination at work, the lowest household incomes and few remote workers among older adults–coupled with a poor entrepreneurial environment.
A Longevity-Centered Future of Work
“Increasing retirement ages have become a prevalent measure taken around the world to address the sustainability of pension systems. However, doing so requires a comprehensive approach that considers broader social, economic, labor market, and health-related factors,” according to a 2024 report from the International Labour Organization.
Smart countries are investing in a longevity-centric policy. Instead of viewing ageing populations as an economic threat, they recognize a willing and untapped talent pool. Leveraging older workers is always a smart move, but it is essential in a shrinking labor market.
Raising the retirement age may be a necessary step. But without additional employment protections, pathways and purpose, it risks leaving millions behind.
In an age of longevity, ageing populations are not a threat to prosperity—they’re a key to unlocking it.
