The Standard Retirement Age in the US vs. 7 Asian Countries

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Every country takes a different approach to retirement. Some countries pay a flat-rate pension, while others — like the United States — tie retirement benefits to lifetime earnings. Retirement age is another major differentiator, with some countries setting the standard retirement age lower than others.

Here’s a look at the standard retirement age, early retirement options and average life expectancy for U.S. retirement benefits compared with several Asian countries. Also included is the Mercer pension rating, which evaluates countries based on the adequacy, sustainability and integrity of their pension systems — the higher the number, the better the system.

United States

• Standard retirement age: Between 66 and 67, depending on birth year
• Earliest retirement age: 62, with reduced benefits
• Average life expectancy: 79.74
• Mercer pension ranking: 22

The United States provides retirement benefits based on contributions to the retirement system. To qualify for monthly benefits, an individual must contribute for at least 10 years. The monthly amount is based on the career average earnings for the top 35 highest earning years after revaluing to current dollars.

China

• Standard retirement age: 60 for men, 50 for blue-collar women and 55 for white-collar women
• Earliest retirement age: 55 for men and 45 for women in certain industries
• Average life expectancy: 78.79
• Mercer pension ranking: 35

China’s pension system requires 15 years of contributions before residents can receive a benefit. Contributions are equal to 8% of wages. The basic pension amount equals 1% of the pensioner’s average indexed wages and province-wide average earnings for every year worked.

Malaysia

• Standard retirement age: 55, but retirement isn’t mandatory
• Earliest retirement age: A one-time withdrawal is possible at age 50
• Average life expectancy: 76.42
• Mercer pension ranking: 32

Malaysia’s retirement system is set up in two tiers. The first tier is for retirement purposes only, while the second tier is available for certain expenses, such as buying a home or funding education. Workers pay 11% of their earnings into the retirement system, with 70% going to the first tier and 30% to the second. After age 55, both tiers combine into a single fund that retirees can access through a lump sum or monthly benefits.

Funds earn interest at a minimum rate of 2.5%.

Japan

• Standard retirement age: 65
• Earliest retirement age: 60, with reduced benefits
• Average life expectancy: 84.95
• Mercer pension ranking: 30

Japan’s retirement system also has two tiers: a basic, flat-rate pension and an earnings-related plan. All residents are covered under the basic pension scheme, while workers may receive an employee’s pension they pay into, as well.

To receive basic pension benefits, residents must make at least 10 years of contributions. Full benefits are available after 40 years of contributions. Basic and earnings-related pensions are indexed to net wages until the pensioner turns 67.

Indonesia

• Standard retirement age: 58, with incremental increases until it rises to 65 by 2043. There is no mandatory requirement to retire.
• Earliest retirement age: Any age with a minimum of five years’ contribution, once unemployed for at least six months
• Average life expectancy: 71.10
• Mercer pension ranking: 41

Indonesia provides an earnings-related scheme and a defined contribution plan, but the defined contribution plan is slowly phasing out. It required workers to contribute 2% of their earnings. Once pensioners retire with the defined contribution plan, they can withdraw a full lump-sum payment or a partial lump-sum with periodic payments until death.

Indonesia established an earnings-related plan in 2015. Workers accrue benefits based on earnings and contributions, and the plan is indexed to prices.

South Korea

• Standard retirement age: 62, with plans to increase the retirement age to 65 by 2033
• Earliest retirement age: 57, with reduced benefits, increasing to 60 by 2033
• Average life expectancy: 84.14
• Mercer pension ranking: 42

South Korea has an earnings-related pension based on two calculations — the average earnings of the individual over their lifetime and the average earnings of the insured population as a whole. Residents qualify for a pension after making at least 10 years of contributions. People who opt to delay retirement may increase their pension benefits by 7.2% every year above the normal retirement age, with a maximum deferral of five years.

Thailand

• Standard retirement age: 55
• Earliest retirement age: Not possible to claim a pension before the standard retirement age
• Average life expectancy: 79.91
• Mercer pension ranking: 43

Thailand’s retirement scheme combines basic and earnings-related benefits. All individuals who make at least 15 years of contributions are eligible. Those who contribute longer to the system receive a bigger benefit. The earnings-related system allows workers to accrue 20% of their earnings toward the pension benefit for the first 15 years of employment and 1.5% after that.

While there is no early retirement benefit option, qualifying workers can choose to work longer and continue to accrue benefits.

The Philippines

• Standard retirement age: 65
• Earliest retirement age: 60, but the benefit is suspended if the retiree decides to return to work before age 65
• Average life expectancy: 72.30
• Mercer pension ranking: 46

The Philippines retirement system includes three components: basic, earnings-related and minimum pension.

The basic pension is a flat amount based on inflation and wage growth. The earnings-related pension is calculated based on the worker’s average earnings. The minimum pension combines basic and earnings-related pension amounts to set a minimal pension benchmark for those who make at least 10 years of contributions.

While the Philippines allows workers to take an early pension at age 65, it stops payments if the individual returns to work. There is no special benefit if an individual delays their pension past the standard retirement age.

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