Lots of people around the world aren’t prepared for retirement, as my colleague Suzanne Woolley ably explained recently.
There’s one obvious solution to that problem: Postpone your retirement.
A recent academic study called The Power of Working Longer, cited in the New York Times, finds that working just three to six months longer can raise your retirement income as much as increasing your savings by 1% every year for the last 30 years of your career.
Here’s the beauty part: Working longer is a real option, because old age isn’t as old as it used to be. (With exceptions, of course: Not everyone can work at age 65 or 70 or 75; in the U.S., the full retirement age is 67 for people born in or after 1960.)
According to the Social Security Administration’s mortality tables, an American man who turned 65 in 2014 (the most recent data available) had no greater risk of dying in the coming year than one who turned 60 in 1990, 55 in 1957, or 50 in 1900. For women, the mortality equivalent of 65 in 2014 is 60 in 1989, 55 in 1949, or 50 in 1937. Trends are similar in Japan, the United Kingdom, and other nations.
The standard way to calculate the burden of the old on society is called the old-age dependency ratio. It’s simply the number of people 65 and over, divided by the number of those of “working age,” defined as 15 to 64.