Living Longer, Working Longer

Posted on March 18, 2011

0


Two news items this week belie the notion that there is something magical about reaching age 65 (or any other age that begins with a “6”) when it comes to retirement.

The first item comes from a blog post by Catherine Rampell on the New York Times Economix blog. There she discusses a new study that finds that life expectancy for Americans is on the rise, increasing to 78.2 years in 2009, up from 78 years in 2008.

The second item was a report issued by Organization for Economic Cooperation and Development, the OECD. According to a Reuters article about the report:

Making people work longer is the only way governments can keep pension systems going without cutting benefits to the point of driving the elderly into poverty, the OECD think tank said on Thursday. . . .

As aging populations strain retirement coffers, countries around the world will have to raise retirement ages despite deep-rooted public opposition, the Organization for Economic Cooperation and Development said in a report. . . .

The standard retirement age is 65 in most of the OECD grouping of wealthy countries, but many people stop working earlier. Men in OECD nations tend to stop working between 63 and 64, on average, and women at just over 62.

In 2010, the average period in retirement from normal pension age to death was 18.5 years for men and 23.3 years for women.

As life expectancy grows, taking early retirement will cease to be the norm and people will need to work until around 66, the OECD said, suggesting “effective” retirement ages should be 66.6 years for men and 65.8 for women.

Should we be looking at this as a problem, or an opportunity? Looking at it as a positive, if people are living longer, healthier lives, then staying in the workforce for another couple of years could be good on many levels. On the other hand, forcing people to work longer who may be in physically (or mentally) taxing or stressful jobs seems a bit unfair. Not to mention the fact that the longer people delay retirement, the more challenging it can be for younger people just entering the workforce to obtain meaningful responsibility early on in their careers. But, for better or worse, the sooner we realize that once we turn 65 we may not be headed for the beach or the golf course, the better we can plan, both as individuals and as a society.