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Euro 2012: Distracting Europeans from Re-thinking Retirement

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Perhaps the old English adage is true after all: Football is the remedy for all ills. As Europe struggles to keep Spain and the rest of the euro zone economy from tanking, Euro 2012 has taken the front-pages by storm. The soccer tournament, held every four years, is more significant to the Europeans than the World Cup is to the Brazilians or the Super Bowl is to Americans.

As we have seen in the past week, Euro 2012 is doing a superb job of distracting an otherwise aging and fatalistic Europe. Greece has been on the tips of all European tongues not for its all-but-inevitable exit from the euro zone, but for its shocking underperformance against Poland. And the Spanish, who have put down protest paraphernalia for little nationalistic fanatismo, have a very real shot at capturing their third Euro Cup. With Croatia and Ireland in their Group, Spain's road to the Quarter Finals seems too good to be true.

For Spain, a country with 24% unemployment and 23% of its population past traditional retirement age, another Euro Cup victory may provide some much-needed diversion. With the foundation of its social and economic institutions impossibly ill-fit for 21st century demographics, there must be something deeply cathartic about watching 20-year-olds running around and kicking a ball. Maybe the Californians, whose state-wide pensions scheme is about to crumble, felt the same way as they watched the Kings win the NHL's Stanley Cup.

For all its fascinating political undertones and post-colonial significance (Russia in the same group as Poland and the Czech Republic!), Euro 2012 really isn't much of a barometer for detecting the pulse of Europe. Watch the face-painted Portuguese or the flag-waving Germans, and you might just be duped into thinking everything in Europe is just fine. But it isn't. Those in the business of managing risk for retirement have some unhappy predictions, and a new piece of research by AEGON shows just how dismally the Europeans are thinking of their purported "golden years."

In Aegon's landmark survey, it is revealed that, of 9,000 people surveyed across eight European countries and the U.S., almost three-in-four anticipate being worse off than those currently in retirement. And only 5% imagine a better retirement. In Hungary, a full 84% believe they will retire in worse conditions than those who came before them.

The reason for this negativity is simple: only 12% of respondents think that state pensions are going to remain affordable. Yet, against this anticipated pension shortfall, almost half of survey respondents do not think that retirement ages should be changed. While almost nine-in-ten support pension reform, they don't support a re-imagined scheme of retirement.

It is an incompatibility, to be sure, and AEGON CEO Alex Wynaendts offers a succinct assessment: "A concerted effort is needed to reconsider traditional retirement models and provide greater flexibility for phased retirement. If current pension systems are not adapted to the new realities of longer life spans and declining government and employer funding, the burdens placed on society will be a source of even greater economic and societal turmoil in the future."

In other words, the Aegon survey reveals that we're trying to save the fruit while ignoring the tree's dying roots. And, as Wynaendts suggests, we are doing this even as people seem to accept a growing sense of responsibility. This adds either a level of irony or surprise to newly-elected French President Hollande's move to rescind his predecessor's retirement reform. Now, the French no longer have to wait until a whopping 62 to retire. With the average French life-span creeping into the 80s, they can again retire at 60. This, mind you, in a country where almost 30% of its population will be over 60 by 2030!

In order to create secure, healthy and happy retirements, we must create new ways to think about work and retirement for the 21st century. We need to ask how we can transform retirement so that "seniors" can continue to contribute to business and society at the highest levels. And we need to ask how we can re-create work and education so that aging workers can remain vital and at the cutting-edge of work.

It is not only wasteful to marginalize and squeeze out older workers, but in our 21st century -- a time when there will be, for the first time in history, more old than young -- it is economically unfeasible. With more people over 60 than under 14 by mid-century, we need to fundamentally re-think the assumptions that underlie our social, economic, and political institutions. But, as these difficult questions sit on the horizon, Europe remains happily distracted by Euro 2012. And, really, who can blame them?