Barron\'s - 09.09.2019

(Kiana) #1

20 BARRON’S September 9, 2019


also requires companies to rehire those who still


want to work after 60, though it can be at lower


wages and responsibility levels.


But money is not the primary reason many


Japanese work well past 65. Social engagement


and a sense of ikigai —a view that one’s life is


still worth living—rank high among the motiva-


tions to remain on the job, says Takaoh Miya-


gawa, an aging and retirement expert at life


insurer Aegon Sony Life in Tokyo.


Consider Kamikatsu, a rural mountain village


with a rapidly aging population. The residents


revitalized its economy by creating a cottage


industry—picking the colorful leaves that grow


around town and selling them as garnish for


Japanese cuisine and decorations. Kato Manu-


facturing hires retirees to work on the week-


ends and holidays to keep factories running


continuously. Convenience stores and fast-food


chains have proactively hired the elderly, and


small businesses that have struggled to find


talent amid a national labor shortage also have


tapped retirees.


But Corporate Japan isn’t fully on board.


Nearly 70% of older people want to work beyond


the age of 65, but only 20% are actually em-


ployed, according to the AARP, the U.S. organi-


zation that focuses on issues facing retirees. The


Japanese government is trying to change that,


making expanding employment opportunities for


older adults a key component of its national


strategy to revitalize the economy. Its Silver


Human Resource Centers offer short-term job


opportunities in the community. They tend to be


low-wage positions, but the program still repre-


sents the kind of strategy that the U.S. could


emulate to help experienced workers remain pro-


ductive and engaged, says Ramsey Alwin, direc-


tor of AARP’s financial resilience thought leader-


ship. Another way for Japan—and the U.S.—to


employ older individuals is by offering more flex-


ibility, opportunities to refresh skills, and lifelong


learning, which would also help companies woo


coveted younger talent, Alwin adds.


Takeaway:It’s an old, but true, bit of advice:


When people work longer, they can continue to


save, and their savings don’t have to stretch as


far. But what’s possibly more important is the


notion of ikigai : When older adults stay active


and engaged longer, it lowers health-care costs.


AUSTRALIA


Employers must contribute 9.5% of


their employees’ income to Australia’s


version of a 401(k), called the Super.


There’s also a means-tested Age


Pension to ensure all retirees have a


minimum income.


BRAZIL


Brazil has been very generous to its


retirees, to the point its pension system


is now unsustainable. The nation is in


the midst of change, implementing its


first retirement age and increasing


mandatory contributions.


CHINA


The one-child policy from the 1980s has


since been replaced by a two-child policy,


but neither is enough to support a


pay-as-you-go pension.


SWEDEN


As part of sweeping pension overhaul


in the 1990s, Sweden privatized a small


part of its public pension system. Next


up: increasing the age at which retirees


can withdraw the money.


UNITED KINGDOM


In 2012, the U.K. began requiring


companies to auto-enroll employees


in a defined contribution retirement


plan, improving participation across


the board.


JAPAN


Japan has one of the highest


old-age dependency ratios—there


are far too few young workers to


pay into the government pension


that goes to elderly retirees. The


Lost Decade still has a deleterious


effect on personal savings.


Social Security Around the World


Most developed nations have a program to keep the elderly from becoming impoverished. Some plans are more successful than others.


By Alessandra Malito


UNITED STATES


Retirees really rely on Social Security


benefits: It’s the primary source of


income for 61%, and 90% of income for


a third of the people collecting it.


Source: MarketWatch


  1. Silent Square


Dancing


There’s no do-si-


doing, but throngs of


older Chinese have


taken to dancing in


squares, creating


such a ruckus that


other residents have


complained. The


result? Silent


square-dancing,


with the dancers


wearing headphones


so they can still


move in sync.

Free download pdf