Retirement Ages Geared to Life Expectancy

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For most of the 20th century, life expectancy was on the rise. Yet older Americans were retiring at younger and younger ages. That changed in the 1990s. Life expectancy continued to rise, but retirement ages started increasing too.

Many significant developments are behind the dramatic shift in retirement habits, including the decline of private-sector pensions, changing attitudes about working women, and bigger financial incentives from Social Security for people who remain in the labor force in order to get a larger monthly check when they finally retire.

Given all of these changes, Urban Institute researchers wondered whether the dramatic longevity gains experienced by the people who make it to their 50s and 60s could be counted as another reason for the delayed retirement trend.

Their evidence suggests that growing lifespans are keeping men over age 55 in the labor force longer and postponing their retirement, particularly in areas with strong job markets and more opportunity.

But women’s behavior was much more nuanced. Their labor force participation also increased, but only for women under 65 and to a much smaller extent than men. For the oldest women in the study – ages 65 to 74 – the results were puzzling to the researchers because labor force participation actually declined with life expectancy for those in the bottom half of the income distribution.

This isn’t the first research to link longevity to retirement timing. For example, in a 2014 study, people who expected to live longer – based on their parents’ longevity – also worked longer. The new study instead used average life expectancy, based on death certificate data in U.S. Census commuting zones, to determine its effect on labor force participation among the older populations in each zone. The study covered a short period – 2011 through 2015 – to capture a time when everyone was operating under roughly the same national economic conditions.

People retire when they do for a variety of reasons – longevity is just one. But the researchers have added to our understanding of longevity’s influence on men’s retirement, while raising new questions about women.

To read this study, authored by Damir Cosic, Aaron R. Williams, and C. Eugene Steuerle, see “Do People Work Longer When They Live Longer?”

The research reported herein was derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.

Catherine Cadoo

I am surprised that researchers found it puzzling why work force participation dropped for lower-income women ages 65-74. Are companies eager to hire elderly, undereducated women with health problems? A lower income is typically correlated with less education and poorer health outcomes. Do elderly women who never experienced great success in a professional environment suddenly gain the confidence and skills to become employed? It is rare.

Edward P HofferMD

Working longer has numerous benefits: your Social Security income goes up (plateauing at 70); you have fewer years to live off your savings; you get the stimulation and social interaction of the workplace. This, of course, assumes that your health allows you to keep working, and is much easier for white collar workers.

Thomas Gomes

Don’t worry. Be happy!

Thomas Gomes

Not much difference between fascism and capitalism. Their mottos are mostly the same. “Work sets you free.”

Josh Scandlen

Seems pretty simple to me, the financial industry has scared the crap out of people.

The insane annual Fidelity “study” saying you’ll need $300k for health care costs over your retirement…and that doesn’t include long term over!!! Such a scam.

Secondly, in this very article the author states:
“Bigger financial incentives from Social Security for people who remain in the labor force in order to get a larger monthly check when they finally retire.”

The insinuation is you MUST stay working in order to receive a larger Social Security check. Nope. That’s simply not correct.

It’s the DELAY in your filing for Social Security that brings a larger check, regardless of your employment status, especially if you already have 35 years of labor.

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