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.


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 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.


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.


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.


In 2012, the U.K. began requiring

companies to auto-enroll employees

in a defined contribution retirement

plan, improving participation across

the board.


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


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


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


with the dancers

wearing headphones

so they can still

move in sync.

Free download pdf