Retirement & Financial Planning Report

Longer working careers are correlated with longer life expectancy, says a study which however adds numerous caveats including that the data cover only a short period and that the effect might not continue to apply over the long run.

The Center for Retirement Research said that the effect of continued work on life expectancy is difficult to measure because it raises the question of whether working causes the person to live longer, or whether persons who are in better health are able to work longer and choose to do so, for financial and other reasons. However, it said that a 2009 change in tax policy in the Netherlands aimed at encouraging people to continue working into their mid-60s in effect acted as an experiment that eliminated some variables.

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It said that before the policy change, mortality rates for both working and non-working men in the age 62-65 range had been declining at the same rates—but afterward, the rate “continued to improve somewhat for working men while the mortality rate for non-working men plateaued. Those who continued working were about 2 percentage points less likely to die within five years than those who were retired—from about percent to about 6 percent.

“A key question is whether the reduction in mortality is only temporary – will it only occur during the five-year window studied in this analysis – or whether it will put mortality on a permanently lower track. If the reduction in men’s mortality is only temporary, their remaining life expectancy after age 60 would rise from 21.5 years to 21.7 years, or about two extra months. If, however, the effect on mortality is longer lasting, remaining life expectancy could increase by about two full years,” it said.

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