‘Sacre Bleu!’ How The French Are Reacting To Their Retirement Problem
Celebrating my 100th podcast
Ric Edelman: It's Thursday, March 9th. Welcome to the 100th episode of The Truth About Your Future podcast. I've been doing radio for 32 years and in January a year ago, we converted the radio show into this new daily podcast. I'm excited that you're still with me on this journey and I'll now shift from looking backward to the start of this podcast - January of 2022 - to the future, and I want to share with you what the future of retirement in America looks like. And unfortunately, it's not pretty. In fact, the future is already here. We can see our future simply by looking at what's going on elsewhere, particularly South Korea and France.
In South Korea, the nation's pension system is going to run out of money in 2055. Too many retirees they have in South Korea and not enough babies, meaning not enough future workers to pay for the benefits of all those retirees that they're soon going to be getting. The government says that they're going to announce changes to their pension program later this year. They have one of the largest pension and retirement systems in the world already. The folks in South Korea pay 9% of their income into that system, and the maximum benefit they can get is $9,300 a month. Here in the US, we pay about 12.5% of our income into Social Security. The maximum benefit is over $3,500. One South Korean economist said that what South Korea has to do is obvious. "Everyone knows that we should increase the taxes and reduce the benefits," he said, "but it's a politically sensitive issue".
Sound familiar? Sure does. And let's look at France. They don't have 30 years to worry about this, they're dealing with it right now. And what's happening in France today is exactly what's going to happen here in the US at the end of this decade. French President Emmanuel Macron says France has the same pension problem as South Korea and the same pension problem we have with our own Social Security system. Macron has proposed raising the retirement age so the country's retirement system won't collapse. And yes, he says, everybody in France, you need to work longer. How much longer?
Well, right now, French workers retire with full benefits at age 62. Macron wants everybody to work until they're 64. And the reaction to this outlandish proposal? Protests nationwide. Unions have told their workers to go on strike. Critics say it'll be fairer to tax the rich. Some say the government should seize 2% of the assets of French billionaires. Back in the 1970s, you had to be 65 to retire in France. In 1982, Francois Mitterrand cut the retirement age from 65 to 60. And then in 2000, France created the 35-hour work week. In 1990, 60% of the people in France said work was very important. 60%. Today, only 24% say that. And now one political leader is calling literally for, and I quote, "the right to laziness". He's advocating a 32-hour work week. And as for the move to age 64 for retirement, two thirds of the population of France opposes that idea.
Emmanuel Macron is going to be out of office in 2026. Many in France want him gone right now. That's our future. The government telling us that our Social Security system is collapsing, proposing benefit cuts and higher taxes to pay for it. And the American public is revolting in opposition. You better have your personal finances in order because if you're going to get into your 60s and 70s, depending on the government's promises of Social Security, you're going to feel the pain. That's our future and I'll be sharing with you updates on that every day on this show.
Hey, not only on today's podcast are you enjoying me, but there's another podcast appearance I'm doing today, Something You Should Know, hosted by Mike Carruthers. The topic is Bitcoin 101, giving you an introduction to Bitcoin, blockchain, NFTs and other digital assets. You're welcome to listen to it. Something You Should Know hosted by Mike Carruthers. It's a 30-minute podcast today. Details on accessing it are in today's show notes.
Hope to see you there and be sure to catch Jean's newest podcast episode today. Self-Care with Jean Edelman goes live every Thursday at 1:00 pm Eastern. You can listen to all her shows on YouTube, Apple, Google, wherever you get your podcasts. You can also follow Jean and her podcast on Instagram and Twitter. Check out today's show notes for all the links so you can follow Jean. Thanks and happy 100th to all of us.