New Citi Retirement Age 70?
Yesterday, Citibank the world's biggest banking group, announced the retirement of 70-year-old Mr Sanford Weill as chief executive from January 2004. His replacement as the man in charge of day-to-day operations will be Charles Prince, 53, who has been running Citiís global corporate and investment bank since last September. This appointment ended years of speculation about who would succeed Mr Weill.
So is 70 the new 65 and where did 65 come from anyway. Generally accepted origin of this is adoption of an old-age social insurance program in Germany in 1889. Germany initially set age 70 as the retirement age and it was not until 27 years later (in 1916) that the age was lowered to 65 which became one reference point for the US social security program instituted in 1935. The other reference points were that roughly half of the state pension systems used age 65 as the retirement age and half used age 70. But Australia was well ahead of the US with our Old Age Pension Act of 1908 adopting age 65 for age pension.
FinDem has calculated that in 1908 the probability of a 20 year old starting work and surviving to age 65 was 57%. At the same probability in 2003, the survival age would be 83. So maybe 83 should be the new retirement age?
Posted Thursday, 17 July 2003
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