March 11, 2021
Retirement Ages Geared to Life Expectancy
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. …Learn More
Originally posted at https://squaredawayblog.bc.edu/tag/expectations/