Thursday, January 26, 2012

Retirement without Threshold Effect?

With upcoming Presidential Elections in France, one of the recurring big topics is Retirement Age.

Having passed that hurdle some time ago, I don't follow the details very closely, but all the headlines talk about "Retirement Age" & "Retirement Age for Full Pension".

So there are endless battles between politicians all talking at the same time & all concentrating on whether THE retirement age should be 60 or 62 or whatever & whether you should get a FULL pension at 60 or 65 or more - or less in case of particlularly arduous jobs.

It has become, as they now say, a cleaving issue between left & right.

I don't understand why we/they don't drop the idea of "Retirement Age" & just leave everybody to decide freely how soon or late they want to retire.
In the internet age, it is obviously feasible to generate & update a smooth curve for every worker & make it available on a secure Government site.
Everybody could then see at a glance what pension they would get for any chosen retirement point, whether at age 25 or 125.
There should be no steps or preset ages, to avoid threshold effects.

Generally, threshold effects should be avoided in all taxation & benefits schemes.

This would save a lot of wasted time, energy & especially emotion.

Politicians could concentrate on other important issues.

I think there are plenty...

Parting thot: "The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing." - Jean Baptist Colbert

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