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Let people retire when they are ready

By Li Xing (China Daily)
Updated: 2008-11-13 07:47

Ask the Internet "When is best time to retire?" in English and you will get more than 1.5 million replies, most of them offering financial advice and warning against early retirement.

A similar search in Chinese yields about 43,000 results, many of them engaged in an on-going debate over a proposal to push the mandatory retirement age back to 65 - from the present 55 for women and 60 for men - by the year 2030. The proposal would increase the retirement age by one year every three years, starting in 2010 for women and 2015 for men.

People who support the proposal argue that postponing retirement would increase the amount paid into social security, while reducing the amount paid out to the increasing number of the elderly.

China is fast becoming what the United Nations terms an aging society, with the number of people at or above 60 accounting for more than 10 percent of the population. Experts predict that social security will face a shortfall of 1,210 billion yuan ($177 billion) by 2020.

According to an online survey, however, some 60 percent of 120,000 respondents oppose raising the retirement age, fearing that it will cause an increase in unemployment among young people.

The debate reflects a stark reality that the nation must be prepared to face. China's population is expected to peak between 2020 and 2033. There will be 162.3 million elderly in 2020 and 320 million by 2040. Meanwhile, nearly 1 billion people between the ages of 16 and 64 will be in the work force by 2020.

The numbers alone are shocking.

But so far, we have done very little to prepare for the problems presented by these population trends. China has vast natural resources, but will they be enough to support such an enormous population? How will we employ such a huge work force? How will we take care of the elderly and enable them to enjoy a fruitful old age?

Many people are still forced to retire between the ages of 40 and 50, with a tiny pension and little opportunity for career change or advancement. I remember receiving a text message from a former classmate a few years ago. She was forced to retire, but had a daughter in college to support.

The present system requires women to retire sooner than men, preventing a lot of talented women from making further contributions in their professions.

There is also the urban-rural divide. Until two years ago, only 4.8 percent of the rural elderly received some kind of pension, compared to 78 percent of urban retirees. Many rural elderly live alone in their village homes, while their sons and daughters eke out a living as migrant workers in the cities.

Whether or not the retirement age is increased, China must take action now to improve its social security system and extend it to people living in rural areas. We must find ways to take advantage of the knowledge and experience of the elderly, while allowing middle-aged people to advance in their professions and creating opportunities for young people.

When is the best time to retire? There is no one right answer. The best policy might be to allow people to retire when they are ready, rather than dictating a retirement age for everyone.

E-mail: lixing@chinadaily.com.cn

(China Daily 11/13/2008 page8)