In a move aimed at ensuring the long-term sustainability of its pension system, Denmark is raising its official retirement age to 70 by 2040. The change, part of the 2006 Welfare Agreement, links the retirement age to life expectancy – meaning as people live longer, they’ll be expected to work longer too.
“This is about securing proper welfare for future generations,” said Denmark’s employment minister, underscoring the need to adjust retirement policy in step with demographic realities.
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Denmark isn’t alone. Several other OECD countries – including Estonia, Italy, the Netherlands, and Sweden – have either implemented or are considering similar reforms. By linking retirement age to longevity, these nations aim to preserve the financial health of their public pension systems without overburdening younger generations.
With Social Security facing its own financial challenges, the question now is: Could it happen here?
Should the U.S. raise its full retirement age?
Currently, Americans born in 1960 or later reach full retirement age (FRA) at 67. But with Social Security’s trust fund projected to be depleted by 2033 – and beneficiaries facing a potential 21% cut in benefits thereafter – raising the FRA to 70 is once again being floated as a possible solution.
This isn’t the first time the U.S. has considered such a move.
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A look back: The Greenspan Commission
In 1981, facing a similar funding crisis, Congress and the Reagan administration created the National Commission on Social Security Reform – commonly known as the Greenspan Commission. Its mission: address the short-term insolvency of the Old-Age and Survivors Insurance (OASI) Trust Fund and propose reforms for long-term sustainability.
By early 1983, the commission delivered a bipartisan set of proposals that formed the basis for the Social Security Amendments of 1983. Among the key outcomes:
- Closed a short-term funding gap just weeks before the trust fund was expected to run dry.
- Recommended structural reforms to strengthen Social Security’s finances over time.
- Increased the full retirement age gradually from 65 to 67 for future retirees.
- Raised payroll taxes for workers and employers alike.
The result was both a short-term fix and a long-term shift in expectations for future beneficiaries.
Today, with a new funding shortfall looming, experts are asking: Is it time for another Greenspan Commission?
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Why longevity matters
Life expectancy plays a central role in the Social Security debate. In 1940, when Social Security benefits were first paid, a 65-year-old man could expect to live another 11.9 years; a woman, 13.4 years. Today, those figures are 17.9 and 20.5 years, respectively – a 50% increase in longevity for men and 53% for women.
Longer lives mean longer benefit collection periods – and more strain on the system.
That’s especially concerning given that we’re now experiencing what some experts call “Peak 65” – the year when the largest number of Americans in history are turning 65.
According to Pew Research, there are currently about 62 million Americans age 65 and older, making up 18% of the population. By 2054, that number is expected to climb to 84 million, or 23%.
What raising the FRA could mean for you
For now, Americans can begin receiving Social Security retirement benefits as early as age 62. But you only receive full benefits once you reach your FRA, and delaying benefits up to age 70 increases your monthly payout.
For example, if your FRA is 67 and your monthly benefit is $2,000:
- Claiming at 62 reduces it to $1,400
- Waiting until 70 boosts it to $2,480
“The earlier you take Social Security, the bigger the cut from your full retirement benefit,” says Jeremy Finger, a certified financial planner with Riverbend Wealth Management.
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So, could the full retirement age be raised to 70 in the U.S.?
“It could definitely happen here,” Finger says. “It would solve the Social Security funding issue – at least temporarily.”
But he adds a caveat: as with the 1983 reforms, any change would likely affect younger workers, perhaps those under 50. “We need to prepare for that by saving more and/or working longer,” he says.
Who might be affected most?
Melissa Caro, a certified financial planner and founder of My Retirement Network, agrees a change is possible – but politically difficult.
“Raising the retirement age has been suggested before, along with other proposals,” Caro says. “But it would disproportionately affect lower-income workers and those in physically demanding jobs, who often have shorter life expectancies and less capacity to work longer.”
She expects strong opposition from labor unions and advocacy groups, making legislative movement difficult.
Still, Caro encourages proactive planning – not out of fear, but out of prudence. “Panic is not warranted,” she says. “But flexibility in your long-term plans is key.”
Her advice:
- Understand your income gap: Run a basic retirement forecast assuming retirement at 62, 65, or 70. Use it as a planning range—not a rigid goal.
- Prioritize savings you control: Rules for Social Security may change, but money in Roth IRAs, HSAs, or brokerage accounts is yours to manage.
- Think in phases, not fixed dates: For those in physically demanding roles, phased retirement or part-time work can offer more sustainable options.
- Know your claiming options: Even if FRA increases, early benefits at 62 will likely remain—though at reduced amounts.
“We don’t know what policymakers will ultimately decide,” Caro said . “But the more control and clarity you can build into your plan, the better prepared you’ll be.”
Physical limits matter when it comes to when to retire
Thomas Balcom, a certified financial planner with 1650 Wealth Management, also sees the possibility of a raised FRA as a way to protect Social Security’s solvency.
Most white-collar jobs would allow workers in their 60s to remain employed, he says. But for blue-collar workers – construction laborers, for example – it may not be physically possible.”
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Accommodations may be necessary, he adds, and workers should prepare accordingly:
“Most white collar jobs would allow for folks in their 60s to still be employed,” he said. “However, folks in some blue collar jobs, for example construction, laborers and the like may not be physically able to still complete their jobs, so accommodations might need to be made for those folks. I don’t know how many Danish retirees were engaged in manual labor, but I doubt that the figure is high.
In response to how individuals could prepare for that, Balcom said they may need to search for jobs that they can still perform in their 60s “In addition, they should ensure that they remain in good health in order to be able to earn a living” he said.
Bottom line: The U.S. may not be Denmark – but with rising life expectancies, increasing retiree populations, and mounting pressure on Social Security, the idea of raising the retirement age to 70 is back in the spotlight. Whether it happens or not, the smartest move for workers today is to plan for flexibility – and control what they can.