Germany Is Considering Retirement at 70, And the U.S. Could be Not Far Behind

Working longer before retirement could soon become the new normal in parts of the world, and it may not stop there.

Germany is weighing a plan to gradually raise its retirement age to 70, a move that highlights growing pressure on pension systems and raises questions about whether Americans may need to rethink their own retirement plan.

Germany's proposal to raise retirement age

Germany's government-appointed pension commission has recommended increasing the country's retirement age to 70 by 2092.

The change would not happen overnight, but the current retirement age is already rising and is set to reach 67 by 2031, meaning any further increase would be gradual over decades.

The commission also proposed scrapping a rule that allows workers with 45 years of contributions to retire at 63 without penalties, a benefit that has been widely used.

These recommendations still need to go through parliamentary debate and approval, so no changes are guaranteed yet.

Why countries are pushing retirement higher

Germany is not alone in reconsidering retirement rules. Countries including France, Italy, and China have all proposed or implemented changes to push retirement ages higher, largely in response to similar challenges: People are living longer, while fewer workers are paying into pension systems.

This imbalance creates financial strain, as governments must support retirees for longer periods with relatively fewer contributors funding the system. The same demographic trends are playing out in the United States.

The pressure on Social Security in the U.S.

In the U.S., Social Security is already facing a timeline that has policymakers on edge. For example, current projections show the program's trust fund could be depleted by 2032.

If no action is taken, benefits would still be paid, but at reduced levels, roughly 78% of what is currently promised, effectively a cut of about 22%. That looming gap is why ideas like raising the retirement age continue to surface in policy discussions.

The U.S. has raised retirement age before

While raising the retirement age may sound drastic, it has happened before. In 1983, Congress passed reforms that gradually increased the full retirement age from 65 to 67. The change was phased in over time, affecting people born in 1960 or later.

Today, Americans can still claim Social Security as early as 62, but doing so permanently reduces their monthly benefit. Waiting until age 70 increases benefits to about 124% of the full amount. The current structure already encourages people to delay retirement, even without further policy changes.

Could the U.S. follow Germany?

Andrew Biggs, a senior fellow at the American Enterprise Institute, said raising the retirement age is politically difficult but likely to remain part of the conversation.

"Raising the Social Security retirement age is never popular," he said. "But I also wouldn't be at all surprised if an eventual bipartisan Social Security reform package included an increased retirement age."

Biggs noted that longer life expectancy is a key factor, as people are collecting benefits for more years than in the past.

However, he also emphasized that raising the retirement age alone would not solve the problem. Even a two-year increase would only address about one-fifth of Social Security's funding gap.

The trade-offs of working longer

While raising the retirement age may help reduce costs, it comes with trade-offs. One of the biggest concerns is that not everyone benefits equally from longer life expectancy.

Higher-income individuals tend to live longer, giving them more time to collect benefits. Lower-income workers often see smaller gains in longevity, meaning they could receive fewer total benefits if retirement ages rise.

Why Germany's system is different

Some experts also argue that Germany's approach cannot be directly applied to the U.S. Teresa Ghilarducci, an economist and retirement expert, says the broader context matters.

"The deeper lesson from Germany is not simply 'work longer,'" she said. "It is that if society expects people to work longer, it must first create the conditions that make longer working lives possible and dignified."

She pointed out that Germany has stronger labor protections and worker support systems, which can make extended careers more feasible. In the U.S., those conditions are not always in place.

What a higher retirement age would mean

If the U.S. were to raise the full retirement age to 70, the impact would be significant. According to Ghilarducci, such a change would effectively reduce benefits across the board. Each one-year increase in the retirement age cuts monthly benefits by roughly 6.66%.

A shift from 67 to 70 would amount to about a 20% reduction in benefits at every claiming age. That's because benefits are calculated based on the full retirement age, so increasing it lowers payouts even for those who claim earlier.

What this means for your retirement

For workers, the takeaway is not that the retirement age is changing tomorrow, but that future reforms could one day be in the cards.

Social Security is expected to face financial pressure in the coming years, and lawmakers will need to make decisions about how to close the gap.

Raising the retirement age is one option, but it would likely be part of a broader package that could include tax changes, benefit adjustments, or other reforms.

Bottom line

Germany's proposal to raise its retirement age to 70 highlights a growing global trend as countries grapple with aging populations and pension strain.

In the U.S., Social Security faces similar pressure. While no immediate changes are in place, the debate may push more Americans to ask whether they are on track for retirement. The broader takeaway is that future reforms may require workers to stay in the workforce longer, making long-term retirement planning more important than ever.