The International Monetary Fund (IMF) has ignited a global debate on the age of retirement, which could evolve into us all having to work until we are seventy or more.
Their argument is that ’70 is the new 50’ due to improved health and cognitive abilities among older populations. In its report, ‘Rise of the Silver Economy’, the IMF highlights that people aged 70 in 2022 exhibit the same cognitive function as the average 53-year-old in 2000, based on surveys of one million individuals across 41 countries. Tests of memory, orientation, and basic maths, alongside physical assessments like grip strength and lung function, show that an average 70-year-old today matches the fitness of a 56-year-old from 25 years ago.
The IMF’s push to raise the retirement age comes from nervousness over the sustainability of the current pension systems as rising life expectancy and falling birth rates are changing our economic model. These trends are increasing the dependency ratio, or the number of non-working individuals in a population, potentially holding back economic growth by reducing labour market participation.
The retirement age in Spain currently ranges from 65 to 67 depending on how much in social security contributions one has made , the IMF suggests not only delaying retirement but also extending the pension calculation period beyond the current 29 years. This could incorporate lower-earning years, reducing pension payouts.
The IMF’s proposal runs in line with warnings from Spain’s Independent Authority for Fiscal Responsibility (AIReF), which predicts pension spending will reach 5.6 per cent of GDP in 2025. The ‘substitution effect’, where new pensioners receive higher benefits than those exiting the system due to death, is expected to add over €2 billion in costs. In March 2025, Spain’s social security system spent €13.492 billion on pensions, a 6.3 per cent increase from the previous year, stretching public finances and ushering a possible future where late retirement could become law, rather than a choice.
While promoting longer working lives, the IMF tips its hat to Spain’s recent initiatives encouraging delayed retirement, which lets workers continue past the legal age for higher pensions. Alternatively, the IMF proposes countries should bolster employment rates through modernised job intermediation services, public-private partnerships, and policies allowing unemployed individuals to work temporarily while still receiving benefits. The measures, the IMF argues, could improve labour supply and national economic stability as a form of addressing the challenges of an ageing ‘silver economy’.
