Retirement

Retirement Trends

Increasing interest in the topic of retirement on the part of researchers, students, policymakers, organizational decision makers, and the general public has been fueled by at least three demographic trends. The first and most notable of these trends is the gradual aging of the nearly 80 million people born between 1946 and 1964, commonly known as the baby boomers. At present, this group represents approximately 50% of the U.S. population in the prime working years (between ages 25 and 64). As this cohort continues to age over the next decade, the percentage of adults between 55 and 64 (when retirement is a realistic option) will increase by approximately 65%. As a result, the baby boomers will no doubt redefine the concept of retirement, as they have so many other concepts as they have moved through their life course.

The second demographic trend is the decline in workforce participation of older adults, namely men, during the second half of the 20th century. The workforce participation rate for men between the ages of 55 and 64 was 87% in 1950 but just 67% in 2000. For men over the age of 65, the workforce participation rate dropped from 46% in 1950 to a mere 17% in 2000. However, this decreasing trend appears to have leveled out somewhat since approximately 1985. For women between the ages of 55 and 64, workforce participation rates increased from 27% in 1950 to 52% in [Page 679]2000. The workforce participation rate for women over the age of 65 also increased, from 8% in 1950 to 11% in 2000. Similar trends have been observed in most developed countries. As a result, the divergent trends for men's and women's late-life workforce participation rates will no doubt redefine the concept of retirement for generations to come.

The third demographic trend is the increasing longevity of the population in developed countries. In 1950, for example, the average 65-year-old could expect to live 13.9 more years; however, by 2002, that number had increased to 18.2 years (approximately 22% longer). Given this trend toward increased longevity, the way we define and study retirement will need to change to accommodate the fact that we may now spend upwards of one third of our lives or more in retirement.

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