Meiji Yasuda Life Insurance, a large Japanese insurance company, has announced a plan to allow the retirement age to be extended to 70 only for those who wish to do so from 2027. This is an example of Japan’s present situation in which companies that increase their retirement age in line with the increase of the elderly population. It is also an inevitable choice due to the deepening shortage of manpower and the inability to maintain the labor site if the elderly fall out.
In Japan, many companies set the retirement age at 60, but they have recently made significant changes. More companies retire and rehire themselves or raise the age to 65 altogether. The employment rate for people aged 65 to 69 reached 52 percent. According to a survey conducted by the Ministry of Health, Labor and Welfare, 26.9 percent of companies have raised the retirement age. Toyota Motor Corp. will start a new system to expand reemployment at the age of 65 or older. Changes are also apparent in lowering wages for reemployment after retirement. Takada Industrial Complex in Kitakyushu City raised the retirement age to 65 in 2021, while significantly lowering the wage cut rate for employees who are re-employed after retirement from around 40 percent to 10 percent.
Discussions are also taking place in China to extend the retirement age. The legal retirement age is 60 for men, 55 for office workers and 50 for production workers. However, such a system that has been maintained for decades cannot withstand a shrinking population. China is seeking to extend its retirement age to 65.
The U.S. has about 70 million baby boomers (born between 1946 and 1964) over the age of 60. When they retire, the shortage of manpower in various fields such as personal service, cleaning, and construction is expected to worsen. For this reason, there are growing calls to provide tax and social security incentives to those who work until their 70s, and to expand the diversification of work methods such as remote and part-time work as the retirement age approaches.
EJ SONG
US ASIA JOURNAL
