No cake for you: retirement age and “rights”

News from the web:

As an actuary who has worked with annuities, I pay very close attention to stories about retirement age.

Before I get into the recent news stories, I want to address the old canard “The life expectancy was less than 65 when 65 was set as a retirement age.”

I’m not saying that they got they’re flat-out lying with this remark, but that they’re looking at the wrong number.

Let me give you an example – a population where everyone dies either at birth [age 0] or at age 100. Life expectancy would be a weighted average between these two numbers, depending on the probabilities. Let’s start at a 50/50 extreme, and you’ve got a life expectancy of 50 years from birth. If the infant mortality is at 1%, then the life expectancy becomes 99 years. But the problem of financing retirement doesn’t change at all — if you survive infancy, you live to 100, no matter the probability.

Read the whole story HERE

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