Is “I just won’t retire” a feasible solution?

Last updated on: August 16, 2016 at 9:52 am by Jane the Actuary

Is “I just won’t retire” a feasible solution? 2016-08-16T09:52:43-06:00 Jane the Actuary

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This post is a bit of a placeholder, as I need to dig up some statistics.

But fundamentally, one of the responses to lack of retirement savings is the “just don’t retire” approach — either individually, planning on working indefinitely due to lack of retirement savings/benefits other than Social Security, or as a solution to the lack of retirement savings by Americans generally.

True, early retirement to live a life of leisure is available to a declining percentage of Americans, as “30 and out” pensions disappear. (My husband and I still hope to early-retire, or have a career change, at least — he dreams of being a flight instructor — but we save aggressively and live modestly relative to our earnings.)

But moving retirement age to 70 or 75?

It’s true that Americans are living longer than ever, and that life expectancy is expected to continue increasing indefinitely. But is the age at which the typical American can productively remain in the workforce really increasing?

Statistics tell a different story — though I can’t recall where I read these statistics, studies have shown that a very large percentage of Americans who intended to work to “normal retirement age” or beyond ended up in early retirement (or “normal retirement” whether they planned otherwise) due to job loss or ill health.

If we move to a significantly later retirement age, we’ll have a sizeable number of Americans on disability in the new interval before the new retirement age, and multiply the existing inequities between those who game the system, those who play by the rules, and those who don’t even know how to enter the game — and we’ll have all this compounded by those who worked blue-collar jobs their whole life long, and now, in principle, could move to white-collar jobs but aren’t really capable of learning the new skills required. (How many greeters does Wal-Mart need anyway?)

We’d also have to deal with age discrimination, which is currently illegal if you’re under age 70, but is very difficult to prove, so that very few age-discrimination cases are successful. And we’ll need to be prepared to pay out unemployment compensation to the large numbers of elderly who can’t find work.

In any event, here’s my personal experience: a little under two decades ago, I experienced a parent being forced out of his job due to (he believed) having reached early retirement age and management wanting to make room for younger people to advance. A decade ago, that parent was working at a part-time job to have something to do, but was also going on cruises and enjoying himself. Now that parent, at the age of 74, has seen his health and strength deteriorate to the point that falls (and the difficulty getting back up again) are a routine part of his life. Sure, at that same age, his own father was participating in mammoth digs in South Dakota (well, maybe somewhat younger; I’m not really sure, but in any event he was quite active and healthy for a long time). At the same time, my father-in-law, who’s 72, has been weak for quite some time and just underwent major heart surgery. Mom (also 74) is still working (retail) and mom-in-law (69) is quite active with volunteering and still bikes around town. Bottom line: none of us can predict when and how severely age will take its toll.

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