The Uneasy Relationship between America’s Life Expectancy and Retirement Age

There has been an unsettling trend happening in the United States. The retirement age has been steadily increasing, but the last two years have seen a dip in life expectancy for the average adult. This suggests that Baby Boomers and middle-age workers may face shorter retirements than previous generations enjoyed. 

Record numbers of Americans older than 65 are still working, and the reasons they’re doing so are plentiful. First, the age at which people can claim full Social Security benefits has moved up. Now, it is 66, but this is expected to increase to 67 by 2027.  Second, postponing retirement makes financial sense for many people. Practically speaking, the longer you work, the more comfortable your retirement should be — especially if you expect to live to 90. However, recent data is showing a problem with this logic: diminished health and lowered life expectancy.

Life Expectancy and Diminished Health

While this decrease in life expectancy is largely blamed on the growing opioid crisis, researchers have plenty of other theories as to why our eldest are experiencing more  health problems than those at the same age did a decade ago. Most likely this trend of diminished health is a combination of several factors, including suicide, drug overdoses, alcohol abuse, obesity, and cognitive decline.

A survey completed by University of Michigan economists, HwaJung Choi and Robert Schoeni, further explored this trend. The study showed that today’s pre-retirees (those in their late 50s) are experiencing more health issues than prior generations did.  Deteriorating health means that even if someone wanted — or needed — to work past typical retirement age, their health may prevent it. Furthermore, diminished health can also mean a less enjoyable retirement, whenever it does happen.

What this Means for Retirement

It is important for Americans to be able to gauge their end of life experience. Their health, as well as when they expect to die, are important variables in deciding when and how they can retire.

This information is not only important for retirement and financial planning, it is also important for policy makers. Robert Schoeni highlights this, saying, “As policymakers talk of making the retirement age even later, these findings suggest that to fully understand the benefits and costs of such a policy, we must realize that raising the retirement age may further exacerbate the inequality between cohorts born only a few years apart, because the younger ones may find it more challenging to work beyond age 67.”

The first step to planning is awareness. Realizing that the traditional retirement of our parents is not as accessible as it once was can help us plan for the future. And more studies, like the one completed by HwaJung Choi and Robert Schoeni, can have a huge impact in how our country moves forward with retirement and Social Security.