Keep on working to stay alive, or retire and die

May 3, 2014 

I thoroughly enjoy the regular polls that Gallup releases. I am aware of all the flaws and pitfalls of these surveys. Indeed, each new sample provides an opportunity to sharpen one’s statistical cynicism.

Sometimes, however, they offer insights into specific aspects of the American psyche, helping to clarify my thinking about societal, economic and market sentiment.

The latest poll is no different. It found that the average age at which Americans report retiring is 62, the highest since Gallup started asking the question in 1991. Current expectations for retirement have increased to age 66, up from 63 in 2002.

Living longer: Lifespans in the U.S. have increased. This is taking place at both ends of the age scale; infant mortality is down and there are many more octogenarians. If you are going to live longer, you will need more money in retirement.

Better health: Obesity aside, Americans are healthier later in their lives than they were just a few decades ago. This might be contributing to people being able to work later in life.

More service and office jobs: Manual labor is difficult, wearing on the body over time. The big increase in office and service jobs means that you can continue working even after your physical prime.

Financial needs: Not having enough cash to retire is another reason people retire later. Another poll found this was Americans’ top financial concern. Wells Fargo noted that the value of financial investments is often the main force driving retirement expectations. The impact of the financial crisis on the savings of those near retirement is another factor.

Retire and die: Retirement age may be increasing because many baby boomers are reluctant to retire. This may be purely anecdotal, but too many people have seen retirees settle into their new life on a golf-course community, and then promptly drop dead. Work and live, retire and die seems to be the message for some.

A few statistical oddities: Like all polls, people say they expect to do one thing, but typically end up doing something else. Gallup notes that since they began tracking the issue of when people plan on retiring, expectations are “consistently higher than the average age at which they actually retire.”

Now here’s my favorite statistic from the survey: Some 11 percent of 18- to 29-year-olds polled expect to retire before age 55. Unless as a group they manage to stash away a lot more money during their working years than any other group, this isn’t going to happen. If anything, as longevity rises, retirement ages will head even higher. These people are in for a surprise.

Barry Ritholtz, a Bloomberg View columnist, is the founder of Ritholtz Wealth Management, an asset management and financial planning firm. Ritholtz is a consultant at and former chief executive officer for FusionIQ, a quantitative research firm.

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