Life expectancy worldwide is climbing and as this happens, governments throughout the globe are reevaluating retirement ages. New retirement ages have significant impacts on workers, particularly in countries like the United States, where changes in retirement systems place more responsibility on individuals to save for their futures. 

Rising Life Expectancy and Retirement Age

According to United Nations Population Division data, global life expectancy has risen dramatically. In 1950, the average global life expectancy was 46.5 years. In 2000, it rose to 66 years. And it is anticipated to reach 76 by 2050. Many governments face pressure to adjust retirement ages to keep pension systems sustainable with people living longer. 

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According to U.S. News, in 2023, France raised its legal retirement age from 62 to 64, beginning in 2030. This sparked nationwide protests from French citizens. China also recently raised its statutory retirement age – it is now 63 for men and 58 for women in certain jobs. Other countries, like Iceland and Norway, already have some of the highest retirement ages globally, at 67. 

Contrasting this, other nations like Sri Lanka have much lower retirement ages, with workers eligible to retire at 55. The benchmarks vary widely but highlight the trend of later retirement as life expectancy continues to rise. 

U.S. Trends: Retirement Ages and Shifting Responsibilities

The current full retirement age in the U.S. (for full Social Security benefits) is 66 or 67, depending on your birth year. However, the average time workers typically leave the workforce is around age 65. 

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Many American workers have historically relied on employer-sponsored pensions for their retirement savings. However, with the rise of 401(k) plans, many companies have shifted away from pensions, placing a higher responsibility for saving on the employees themselves. This makes personal savings strategies even more important. 

"One aspect I emphasize to my clients is the significance of understanding their assets and how they align with their retirement goals," Marty Burbank, an elder law attorney and owner of OC Elder Law in Fullerton, California, told U.S. News in an email. 

Global Pressures and Policy Responses

Raising the retirement age is about more than just longevity. Around the world, birth rates are declining in developed nations, meaning fewer workers are contributing to pension systems and retirement funds. The World Bank reports that fertility rates have fallen from 3.2 births per woman in 1990 to 2.4 in 2019, effectively shrinking the workforce while the proportion of retirees increases. 

To address this disparity, some governments have developed strategies with flexible retirement strategies and incentives for working longer and delaying retirement. Japan, for example, offers higher pension benefits for workers who delay retirement beyond 65. Sweden has also introduced partial pension systems, which allow workers to keep working at reduced hours while receiving partial benefits. 

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Deciding When to Retire

"For many families, they simply cannot afford to retire much earlier because they don't have the financial resources to accept discounted Social Security benefits if they claim early or the funds to purchase private health insurance until Medicare begins," Jamie Upson, a certified financial planner and owner of Stonehearth Capital Management in Danvers, Massachusetts, told U.S. News. 

As life expectancies rise globally, understanding retirement trends and upcoming policy changes may become crucial in retirement planning. Staying informed about financial and health considerations can help retirees navigate this complex decision. 

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