Retirement & Financial Planning Report

An individual’s expectation of lifespan in retirement is an important factor in important decisions including how long the person keeps working, according to the Center for Retirement Research.

It said that living longer typically translates into retiring later since a longer life requires greater wealth to finance that retirement, and greater longevity “is likely associated with better health during one’s working years, making continued work more feasible.”

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The report found there is “a statistically significant relationship between an individual’s subjec-tive life expectancy and his expectations of when he’ll retire. As individuals become more optimistic about living to ages 75 or 85 (relative to their actuarial probability of living to those ages), they push out their planned retirement dates and increase their expectations about working to the milestone ages of 62, 65, and Social Security’s full retirement age. These correlations are fairly substantial.”

However, it notes that a person’s projected retirement date commonly is thrown off if a significant life event occurs, such as a job loss, the death of a spouse, or the need to care for a family member. In addition, a personal health episode or the death of a parent can change expectations of personal longevity, in turn affecting retirement planning.