Work: 'Til death do we part?
Monday, June 04, 2012 9:46 AM
American International Group Inc. CEO Robert Benmosche said Europe's debt crisis shows that governments worldwide must accept that people will have to work more years as life expectancies increase.
"Retirement ages will have to move to 70, 80 years old," Benmosche, who turned 68 last week, said during a weekend interview with Bloomberg at his seaside villa in Dubrovnik, Croatia. "That would make pensions, medical services more affordable. They will keep people working longer and will take that burden off of the youth."
The crisis, now in its third year, threatens to destroy Europe's 17-nation currency union as Greece contemplates exiting the euro and Spain sees its bond yields rise and banking industry falter.
Greece abandoning the euro could be a disaster for the country, and Europe must work to keep that from happening, said Benmosche, whose company was the world's biggest insurer before it took a U.S. bailout.
"People in Greece have to see there is no easy way out of this" and the government must get them to work longer, he said. "If not, and if they go to their own currency, I think they will see huge inflation and it will be devastating for people on fixed incomes."
Greece, where the average life expectancy is 81.3 years, has an effective retirement age of 59.6, among the lowest in Europe, according to data compiled by Bloomberg. French President Francois Hollande, the Socialist who was sworn in last month, has pledged to cut the retirement age to 60 from 62 while increasing corporate and bank taxes and introducing a 75 percent levy on earnings of more than 1 million euros ($1.2 million).
The average life expectancy in Iowa is 77 and 76 for the nation, according to the U.S. Census Bureau.