Denmark’s push for retirement at 70 sparks U.S. Social Security debate

[UNITED STATES] In an effort to safeguard the long-term viability of its pension system, Denmark has announced plans to raise its official retirement age to 70 by 2040. The policy, rooted in the 2006 Welfare Agreement, ties retirement age to life expectancy—meaning that as people live longer, they’ll also be expected to work longer.

The move mirrors a broader trend among industrialized nations wrestling with the fiscal challenges of aging populations. According to the World Bank, the global population aged 65 and older is expected to double by 2050, putting unprecedented strain on public pension systems. Denmark’s strategy is to adjust early, aiming to reduce budgetary pressure while preserving a strong social safety net.

“This is about ensuring proper welfare for future generations,” said Denmark’s employment minister, emphasizing the need for policies that reflect shifting demographic realities.

Denmark is not alone. Countries like Estonia, Italy, the Netherlands, and Sweden have either adopted or are considering similar reforms. By linking retirement age to life expectancy, these nations seek to keep their pension systems financially stable without placing an undue burden on younger generations.

Still, critics argue the policy could have unequal impacts. A 2023 study by the European Trade Union Institute found that lower-income workers and those in physically demanding jobs often face deteriorating health and limited employment opportunities in their late 60s. Advocates for reform contend that inaction could ultimately leave future retirees with even fewer protections.

A Question for the U.S.: Could Retirement Age Hit 70?

With Social Security’s trust fund projected to run dry by 2033—potentially triggering a 21% cut in benefits—some policymakers are revisiting the idea of raising the full retirement age (FRA) to 70 in the United States.

Currently, Americans born in 1960 or later reach FRA at 67, though they can start collecting reduced benefits as early as 62. Raising the FRA has been proposed before, notably during the early 1980s when Social Security faced a similar crisis.

Looking Back: The Greenspan Commission

In 1981, the Reagan administration and Congress created the bipartisan Greenspan Commission to address Social Security’s looming insolvency. Its recommendations, which included a gradual increase in the retirement age and higher payroll taxes, formed the backbone of the Social Security Amendments of 1983. These changes:

• Averted a short-term funding crisis just weeks before the trust fund was set to be depleted.
• Gradually raised the FRA from 65 to 67.
• Increased payroll taxes for workers and employers.
• Created a longer-term framework for solvency.

Today, with another funding shortfall on the horizon, experts are asking whether a similar bipartisan solution is possible—or if action will be delayed until emergency cuts are necessary.

The Role of Longevity in Retirement Planning

When Social Security began paying benefits in 1940, a 65-year-old man could expect to live another 11.9 years; a woman, 13.4. Today, life expectancy for 65-year-olds has risen to 17.9 years for men and 20.5 for women—a more than 50% increase.

However, this longevity is not distributed equally. Since 2010, U.S. life expectancy has plateaued, with growing gaps between socioeconomic groups. CDC data shows a life expectancy gap of more than 10 years between the richest and poorest Americans—raising ethical concerns about uniform retirement age policies.

With the U.S. experiencing what some are calling “Peak 65”—the year in which a record number of Americans turn 65—the strain on Social Security is intensifying. Pew Research estimates that 62 million Americans are currently 65 or older, comprising 18% of the population. By 2054, that number is projected to reach 84 million, or 23%.

What Raising FRA to 70 Would Mean for Workers

Although Social Security benefits can begin at age 62, the monthly payout is reduced if taken before FRA. Delaying benefits until age 70 can significantly increase monthly income.

For instance, someone with a $2,000 monthly benefit at FRA (67) would receive:

• $1,400 if they claim at 62
• $2,480 if they wait until 70

“The earlier you take Social Security, the bigger the cut from your full retirement benefit,” says Jeremy Finger, a certified financial planner at Riverbend Wealth Management.

So, could the U.S. raise its FRA to 70?

“It’s definitely possible,” Finger says. “It would address the funding shortfall—at least in the short term.” He adds that, like past reforms, such changes would likely apply only to younger workers, possibly those under 50.

His advice: prepare by saving more and planning for longer work lives.

Who Would Be Most Affected?

Melissa Caro, a certified financial planner and founder of My Retirement Network, says raising the FRA is politically contentious and would likely face stiff resistance.

“Changes like this tend to hit lower-income workers the hardest,” Caro explains. “They often have shorter lifespans and more physically demanding jobs, making it harder to delay retirement.”

She expects strong pushback from labor unions and advocacy groups. Still, she encourages individuals to plan with flexibility in mind.

“Don’t panic,” Caro advises. “But be proactive.”

Her tips:

• Run retirement scenarios at 62, 65, and 70 to understand income gaps.
• Focus on savings you control—such as Roth IRAs and brokerage accounts.
• Consider phased retirement as an alternative to full-time work later in life.
• Know your claiming options—even if FRA changes, early benefits will likely remain.

“We don’t know what lawmakers will decide,” Caro says. “But personal planning offers the most certainty.”

Retirement Isn’t Just About Age—It’s Also About Capacity

Thomas Balcom, founder of 1650 Wealth Management, warns that raising the retirement age must consider the physical demands of many jobs.

“The U.S. has a more diverse labor market than Denmark,” he notes. “For white-collar workers, extending work into their late 60s may be feasible. But for those in construction or manufacturing, it’s often not physically realistic.”

Balcom believes any reform should account for occupational differences to avoid deepening inequality.

While the U.S. isn’t Denmark, the challenges are strikingly similar: longer lives, growing retiree populations, and fiscal strain on pension systems. Whether or not the U.S. raises the retirement age to 70, one thing is clear—today’s workers should plan for flexibility and control what they can.