Shortfalls in retirement funding are a common source of discussion for people currently at or nearing their exits from the workforce, but new data suggests that those with a longer career runway in front of them are developing potentially unrealistic expectations about what their own retirements will look like.
As life expectancy increases, the World Economic Forum has published results of a new survey looking at how such a reality impacts the posture of retirement readiness globally. Among all the released findings, nearly half of all respondents — 44% — want to be retired by the age of 60.
“This shows a significant disconnect between what people ideally want and what may happen in reality,” the report said. “In practice, ceasing to work at such early ages will exacerbate the gap in savings and target retirement income. It could also be detrimental at a macroeconomic level due to lowering [labor] participation rates.”
However, nearly just as many respondents — over 40% — also express that they want to continue working beyond the age of 65, with men under 50 responding a higher level of desire to work longer when compared to women in the same age range.
“Extending working lives could boost GDP per capita by 19% in 2050 on average in [Organisation for Economic Co-operation and Development (OECD)] countries if employment rates of older workers everywhere caught up with countries like New Zealand, which have a higher employment rate for over-65s,” the report said.
Additionally, while life expectancy has notably grown over the past 50 years, it is expected to grow even further by the end of the century. While currently sitting around 73 years of age as of 2019, the report says it could rise as high as 81 years of age by 2100. Life expectancy was only 48 years in 1950, the report explained.
In any event, the nature of modern retirement should illustrate to the world’s developed nations that retirement issues must be taken more seriously in the coming years in order to adequately address the needs of the global population, particularly in nations that are growing older at a faster rate than they have previously, which includes the United States.
“As people are living longer lives, business, government and individuals need to reimagine how they view [aging] and retirement and explore new approaches to address this emerging demographic transformation,” the report said. “Failing to adopt a multistakeholder approach towards longevity will inevitably result in a significant portion of people retiring into poverty.”