Retirement and Social Security: A Time Series Approach Based on Remaining Life Expectancy

Research Report

Retirement and Social Security: A Time Series Approach Based on Remaining Life Expectancy

Abstract

Traditional analyses of retirement decisions focus on the age, from birth, of the individual making choices about how much to work, consume, and save for old age. However, remaining life expectancy is arguably a better way of examining these issues. As mortality rates decline, people at a given age now have more remaining years of life expectancy than they did in the past. If participation rates at older ages remain constant (or decline), then average time spent in retirement will increase. Additionally, because health status and mortality are positively correlated, adults with more expected years of life are generally in better health (and better able to work) than those with fewer years of remaining life. This paper examines labor force participation rates of older workers considering both chronological age and remaining life expectancy.

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Cross-Center Initiative

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