Over 100 countries across the globe have a social security system or a kind of social pension designed to support its people of old age. Yet, each design, quality, and coverage varies greatly as each nation’s program is often anchored on its historical and economic context.
With that, retirement is handled distinctively depending on which part of the world you live in as a wide array of pension policies and practices are implemented. To give you a clearer perspective, here’s a rundown of some of the retirement benefits available to the elderly around the globe.
The United Kingdom has a treatment for old age. In 2011, the island nation ended the fixed mandatory retirement age, meaning employees can work even if they are beyond 65 years old. Employers also don’t have the authority to force their staff to retire due to old age.
As such, workers in the U.K. can opt to continue working despite reaching the allotted State Pension Age while still receiving their pension. They also have the option not to take their pension in the meantime, which gives them the eligibility for an increased pension amount or a lump sum payout when they decide to claim it.
While the U.K. abandoned the compulsory retirement age, Malaysia implements it for workers in the public sector. Employees who have served the government for at least 10 years also have the option to retire early at 40 years of age. In the private sector, the mandatory retirement age is also 60 years old, where all Malaysian workers have a requisite savings scheme. However, workers relatively low benefits or pension compared to other nations with similar income.
In Singapore, the minimum retirement age is 62 years, which means an employer can require their worker to retire at the age of 62, but prohibits them from terminating any staff younger that age. The Asian country also implements a re-employment program, where they are “re-employ” the retired workers at a maximum of 67 years of age.
Australia’s social security program is called the Age Pension. For any individual to be eligible, he or she must be at least 66 years old and meet the qualifying resident requirement of 10 years. Workers are required to save a certain percentage of their salary to a public or private retirement savings plan regarded as a superannuation account. A person’s assets, income, and other conditions apply and determine how much pension an Australian takes upon reaching his or her retirement.
Social security in the U.S. is also funded by current workers through a dedicated payroll tax. All money paid is then utilized to pay the retirement benefits to eligible people. U.S. citizens usually qualify for full retirement benefits at the age of 66 to 67, which varies depending on their year of birth. At 62, workers have the option to retire but only procure a part of their overall retirement payout.
The Netherlands holds on the best old-age pension system in the entire world. It boasts a sustainable and robust pension system that gives decent income to its old folks. Their state pension age is 66 years and four months as of 2020, which increases gradually, seeing a rise to 67 years in 2024. For each year a citizen work or live in the country, he or she gets 2% towards the flat-rate pension benefit. With that, an individual should have 50 years of contribution to get the full retirement payout (100%). If a person moves outside the country, he or she loses 2% annually, and the pension is computed based on the accumulated years with contributions.
Germany also has a comprehensive social security system that ensures not only its elderly people but also the sick, disabled, and unemployed people, get a comfortable life. Workers pay to a four-part system consists of unemployment, health, long-range nursing care insurance, and pension.
There are great variances in how the social security system and pension plans work in different countries. Some may be more extensive, while others may have a different treatment. What’s remarkable is that all nations have their distinct schemes and changes are being employed to support their aging population.