Planning for retirement is hard for many reasons, including the challenge of answering one key question: Just how long will I be retired?
Knowing how much time you’ll have to enjoy your golden years is paramount to budgeting; after all, you can’t determine how much you need to save for retirement if you don’t know how long you'll need the money.
It's impossible to gauge how long you'll be retired with absolute certainty. But understanding the factors that influence your length of life and how early you can retire are useful in coming up with a good estimate.
How long does retirement last?
On average, the American worker retires at about 64 years old. According to a TIAA Institute study, the average 60-year-old American lives to 82 if male and 85 if female. The study also found that by and large, Americans have a hard time gauging how long they’ll be retired: Most people either couldn’t make a guess or underestimated the average lifespan.
Using the figures above, the typical American will have about 16 to 19 years of retirement. How long will you personally be retired? That may be harder to nail down. While some people work until the day they die, others enjoy retirement for decades.
Here are some of the most important factors that could impact your length of retirement:
Where you live
Where you settle down may give some idea for how long you might expect to live, greatly influencing how long you’ll stay retired. Recent studies have shown that certain areas of the U.S. have higher life expectancies than others.
Residents of the southern U.S. tend to have shorter lifespans than those in the North. But there are many exceptions. According to one study, neighboring states like Nevada and Utah can have a notable difference in length of lifespan, with Utahns living an average of 1.9 years longer than Nevadans.
Another study co-authored by researchers at MIT and Stanford University found that moving to areas with higher life longevity can boost one’s life expectancy by over one year. Longevity for people in a metro area is determined most obviously by access to healthcare, with other important factors including pollution levels, traffic safety and crime. Interestingly enough, large metro areas like New York City, San Francisco and Chicago have been found to have positive impacts on longevity.
Workers with college degrees tend to earn much more over a lifetime than workers without one. According to one study, men with degrees earn about $900,000 more than those with high school education; women degree holders earn $630,000 more than their high school educated counterparts.
Obviously, if a non-degree holder and a degree holder are putting the same percentage of their take home pay into retirement accounts, the (higher-earning) college degree holder will be able to put more away and therefore earn more on their investment.
Having a college degree could also add a few extra years to your lifespan, according to new research from the Brookings Institute. About one-third of working American adults have college degrees. Those degree-holding Americans live to an average age of 83. Non-degree holders, on the other hand, live to an average age of just 75. Deaths of despair, too, are much more common for this demographic (i.e. alcohol and drug-related deaths and suicide); non-degree holders are 12 times more likely to suffer this fate than degree holders.
There's a fairly straightforward connection between gender and average retirement age. Men tend to retire at 65, compared to 63 for women. With women living to an average of 85 and men to 82, one can see that women are typically retired for five years longer than men.
However, the Government Accountability Office found that a very noticeable gap between men’s and women's retirement savings could lead to retired women going back into the workforce more often than men. Due to the payroll discrepancy between men and women, women tend to be less financially secure in retirement and may need to save for longer in order to make up for this.
Having a partner
Having a life partner isn’t just good for preventing loneliness; marriage tends to improve longevity. By retirement age, married men tend to live an additional 18.6 years, or 2.2 years longer than unmarried men. Married women tend to live an additional 21.1 years past retirement, or 1.5 years longer than unmarried women. These married retirees tend to remain active longer than unmarried retirees, too, which means more time to enjoy those years.
Not to mention, there are monetary benefits to retiring while married. Spouses of retirees are eligible for Social Security benefits when their partner retires, worth up to 50% of the retired worker’s primary insurance amount.
Retirement savings, investments and lifestyle
Your retirement fund has an obvious effect on your retirement, because this is the vehicle through which you’ll do most of your saving. Those who save more and invest their money wisely will have more money in retirement, and are thus more likely to be able to stay retired.
Most people nowadays save through IRAs or 401(k) accounts, which each carry their own pros and cons. IRAs, for example, are entirely self-directed and have more investment options, but 401(k)s typically allow higher contributions and can provide extra value if employers match a portion of contributions. Whether you choose one or the other (or both), it’s up to you (and your financial advisor, if you have one) to reach the savings goals you set for yourself.
If you invest poorly or don't save for retirement at all, that obviously makes it harder to retire comfortably during an earlier stage of life. If you do have a nice nest egg, you'll see it depleted sooner if your spending habits are out of whack with your budget and income in retirement.
For workers lucky enough to have a pension plan and keep it until retirement age, they'll get to enjoy guaranteed income for life from funds managed entirely by their employers.
Your support network and general happiness
Surveys have shown a drastic rise in loneliness and isolation among retirees over the last two decades. Keeping a support network around oneself is a key to combating this loneliness, and there’s research that suggests happier people are more likely to live past 85.
A support system doesn't just alleviate social ailments. Access to health care has a notable effect on lengthening lifespan, and retirees certainly need health care; roughly 70% of all retired Americans will need long-term care at some point in their lives. Yet, only a small percentage of people have long-term care insurance. With or without the ability to afford long-term care, having a support network that can care for you in retirement is critical.
As noted above, those with college degrees tend to live longer and can therefore enjoy a longer retirement. But certain careers also correlate to retiring early. Enlisted military personnel, for example, can retire after 20 years of service with a monthly pension payout. The average age for retirement from enlistment service is 41.
Many public-sector employees with pensions are also able to retire fairly early — possibly after 20 or 35 years on the job. These positions include police officers and firefighters. Then there are jobs that require employees to retire by a certain age — like airline pilots, who must retire at 65 per federal regulation.
People who work physically active jobs tend to be healthier, longer-living retirees, too. Those who work occupations with high physical demands like distance walking and heavy lifting live an average of one year longer than those who work sedentary desk jobs.
The conditions of your employment could additionally influence when you might choose to retire as well. Some people choose to work longer than the average retirement age, and these decisions are largely informed by whether the worker can set favorable terms for their employment.
Research shows that older employees favor jobs where they can set their own hours and perform less demanding work in a social setting. Older workers who find themselves able to work under these conditions may choose to stay on the job longer and enjoy the extra income that comes with it, while shortening their retirement.
For example, researchers find that 32% of 70-year-old Americans would work at least part-time if they could do so from their home. Meanwhile, 35% say they'd keep their job past normal retirement age if they could just switch to part-time hours. Almost 45% would take on a job past 70 if it was not considered stressful work.
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