The 68-year-old CEO of insurer American International Group, or AIG, Robert Benmosche, told news reporters last weekend that people are living too long to retire when they are in their 50s and 60s.
“Retirement ages will have to move to 70, 80 years old,” Benmosche said. “That would make pensions, medical services more affordable. They will keep people working longer and will take that burden off of the youth.”
AIG was the world's largest insurer in September 2008 when the U.S. Treasury Department bailed the company out of a liquidity crisis. The U.S. government still owns 61 percent of the country. Benmosche said AIG is developing a plan to convert the life insurance policies it sold to people in Greece based on the euro to a Greece-based currency if Greece switches its currency away from the euro and defaults on loans from the European common market countries.
The Greek retirement age is a hot topic in the financially strapped country and in other parts of Europe. The average life expectancy in Greece is 81.3 years, and the average retirement age is 59.6 years. The system provides for retirement at 55 for men and 50 for women in professions classified as "arduous and unhealthy." Greeks defend their plan, but people in the European countries that have been lending Greece money so it can continue to pay its version of Social Security are angrily critical.
Anders Borg, Swedish finance minister, summed up the European attitude when he told reporters, "It is not reasonable to think that (Greece) should have a retirement age of 40 or 50 years and then send the bill to someone else."
In the end, most people believe that Greeks will have to swallow the reality that they have to work longer, pay more into the system and get less in return.
Does that recipe for fixing a national retirement plan sound familiar? Do you believe that eventually our retirement planning will include the assumption that we will work to age 80?