Chinese legislature increases retirement age for females past 50, aiming to strengthen national finances.
For the first time since the 1950s, China has increased its retirement age. On a recent Friday, the parliament voted to have men retire at 63 instead of 60, as stated by state broadcasts. Women's retirement age will depend on their profession, ranging from 55 to 58. Currently, factory workers in China can retire at 50, while office-working women can retire at 55.
The new pension guidelines will be gradually implemented over a 15-year span, commencing in January. For instance, a man born in January 1971 may retire in August 2032 at 61 years and 7 months, according to a provided chart. A May 1971-born man would retire in January 2033 at 61 years and 8 months.
China is anticipating a population decrease. The average age of the workforce is escalating, necessitating this move. As per scientist Xiujian Peng, who studies China's population development and its economic implications at Victoria University in Australia, "We're seeing an increase in individuals reaching retirement age, putting high pressure on the pension fund. I believe it's time to take substantial action." The 1950s-set retirement age aligns with a life expectancy of approximately 40 years at that time.
By the end of 2023, approximately 300 million individuals in China would be over 60 years old. This number is projected to rise to 400 million by 2035, surpassing the U.S. population. The Chinese Academy of Social Sciences had formerly predicted that the state pension fund would deplete by that date. "It's a challenge anywhere," observed Yanzhong Huang from the Council on Foreign Relations think tank. "However, in China, with its substantial elderly population, the challenge is even more acute."
Moreover, fewer births are occurring due to financial constraints deterring younger individuals from having children. In 2022, the National Bureau of Statistics confirmed a shift from population growth to decline. In 2023, the population continued to decrease, dwindling by 2 million people.
In light of the increasing number of individuals reaching retirement age, businesses in China are expected to invest in more cash registers to manage the influx of retirees cashing out their pensions. The extended retirement age will also lead to a longer period of sales at retail stores, as retirees have more time to spend their retirement savings.
