The Centre is planning to raise the retirement age for employees in 2025, the move set to change the future of crores of government and private sector employees. The decision has been made with lengthening life expectancy in mind and taking into account the demand on the pension system and new job opportunities for the young. If you’re working or nearing retirement, that change may impact your planning. Tell us what you think about what changes the new rules will bring and how they will affect you.
Increase in Retirement Age
The current retirement age of most government workers is 60 years, but the government has decided to change this to 62 years effective 2025. For some special picks and high ranking people serving high posts even up to 65 years of age is the upper age limit. It has the goal of keeping knowledge from older employees and to take a load off of the pension system.”
What Will be the Impact on the Private Sector?
This new rule likely will apply to private companies as well as government jobs. Many, many large private big companies also copy the government in stuff like this, so there’s a chance they’ll raise the age too on their end. But this may vary according to the company as well.
Youth Employment Opportunities
The elderly may be able to work more, but the young are afraid they won’t find a new job. But the government carries the argument that besides this new policy other employment generation programs will be operated also, so that the youth will not have to suffer.
Impact on Pension and Gratuity
Raising the retirement age will also impact pension and gratuity of employees. Because the salary will be received for more years, the resultant pension will also be higher if based on the last salary. But this will place a burden on the government and companies.
Advice for Employees
If you are planning for retirement, tweak your financial planning based on the new rules. More working years equals more savings and a fatter pension, but you have to consider health and energy levels too. You should let financial advisers help you to make the right decision.
Conclusion
The move to raise the retirement age is made in the light of the country’s economic and social requirements. Good, for those with experience; the youth and the employers will have to get used to the changes as well. With smart planning and informed awareness, everyone can benefit from this policy.
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