What would you do if you lived to be 100? Vanguard asked that question in an interview with Olivia Mitchell, professor at The Wharton School of the University of Pennsylvania and executive director of its Pension Research Council, and Stephen Utkus, who directs Vanguard’s Center for Retirement Research.
People are living longer already, and children born after 2000 may well live to be 100, Utkus said. “Not all children, of course,” he added. Where those children live, their education, income, wealth and health all play a role in their life expectancy. “There are all kinds of other factors, but on average, if you had a child or grandchild born in 2000 or later, there’s a very good chance that child will live to 100 based on current knowledge. This is not some wild extrapolation of trends.”
Mitchell and Utkus stressed that in all the talk about crises — retirement shortfalls, the end of Social Security or Medicare — there are positives advisors and clients can focus on. People are living healthier and longer, Utkus said, and Mitchell noted that there are more jobs that are amenable to older people than there were 40 years ago — If you have to keep working, at least you can.
It’s true that being able to work longer isn’t necessarily going to be on anyone’s list of the benefits of getting older, but Mitchell said, “there are indications that people who work longer — that is, retire later — are more likely to remain healthier, to keep their mental acuity, and to retain the social bonds with their colleagues and friends at work.”
To capture those benefits, though, she said workers need to recognize early on the possibility that they may have an extended career and prepare for it. “I don’t think one can wait until one is 65 or 70 years old to say, ‘Oh my goodness, I should invest in my skills and update my training,’” she said. Workers should make a continuous effort throughout their careers to make themselves as interesting as possible to the employers they want to work for.
Utkus noted that being able to work longer will also be important considering Social Security’s uncertain future. “Not only is there a need for people to consider working longer because of increased longevity, but also the demographic changes, people’s increased life spans, are putting pressure on the public retirement programs, such as Social Security and Medicare.”