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Retirement Changes Dramatically Over the Years

You may not be surprised to hear that retirement has really changed over the years, but you may be astonished to see the actual demographics. I did some research into what has happened to the average retirement age during the last century, and how those changes, and changes in life expectancies, have changed the demographics of retirees.

In 1910, life expectancy at birth was only 50 years. Retirement was only for the very old, and the average age of retirement from the work force was 74 years. Retirees in 1910 had surpassed the average life expectancy of a newborn by 24 years before they quit working! Life expectancies were short because so many people died in childhood or at very young ages. The hardy souls who lived through childhood illnesses and injuries actually could live a fairly long time, so a 74 year old retiree in 1910 might still live another 7 years after retirement. Very few people made it to that age, however, and those people who were “retirement age” or older in 1910 represented only about 1% of the total population.

In contrast, by the year 2000, life expectancy at birth has increased by 23 years to age 73, and the average age of retirement has dropped by 12 years to age 62. A 62 year-old retiree in the year 2000 can expect to live another 18 years, more than 2 1/2 times as long as the retiree in 1910, and nearly half as long as the time they were in the work force. Today's retiree has to plan for, and finance, all those additional years of retirement, and society has the challenge of supporting a “retiree” population which has grown to represent 15% of the total population.

Year Life
Expectancy
at Birth
Average
Age of
Retirement
Retirement
Age
Population
1910 50 74 1%
1940 61 70 5%
1970 67 65 10%
2000 73 62 15%

Some Notes:

Average retirement age is calculated by using data from the U.S. Department of Labor to determine the age at which 50% or more of the male population was no longer in the work force. See “Increasing the Retirement Age for Social Security Pensions,” Testimony to the Senate Special Committee on Aging, by Gary Burtless, The Brookings Institution, Washington, D.C., July 15, 1998.

Average working years were estimated assuming each person entered the workforce at age 20 and left at the average retirement age.

Average years in retirement were estimated by using average life expectancies at the average retirement age. Life expectancy of 74 year old in 1910 was estimated using life expectancy of 75 year old in 1900, other life expectancies are taken from life tables for the designated year. Male life expectancies were used since historical retirement figures are for male retirement from employment. Life expectancies at retirement age for women would be higher.

Retirement age population as a percentage of the total population was taken from U.S. Census Bureau data. The size of the 70+ population in 1940 was estimated, 2% of the population was age 75+ in 1940 and 7% was age 65+. The size of the 62+ population in 2000 was also estimated, 13% of the population is age 65+ in 2000 and 17% is age 60+. Now compare this with the actual history of senior living. There is some amazing information and research on the history of this industry that is worth checking out.

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