Those who retired at 55 were 89% likelier to die within 10 years of retirement than those who retired at 65.
Governments and think tanks are scrambling these days to fix our public and private pension systems, whether by plugging gaps that they see for certain demographics or by giving all of us more income to retire on.
They should instead be asking why we need pension systems at all. Pensions for workers are retrograde ideas, barely a century old in the English speaking world, that have outlived their purpose, if they ever had a valid one at all. Instead of incenting us to retire, we should be incented to keep working. We’ll live longer and better, and we’ll make the world a better place, too.
A 2005 study published in the British Medical Journal that compared all Shell Oil employees in the U.S. who retired at age 55 and at age 65 shows how dubious the supposed ideal of early retirement can be. As one example, those who retired at 55 were 89% likelier to die within 10 years of retirement than those who retired at 65, although this may be explained in part because people retired early for health reasons. To correct for that possibility, the authors among other corrective measures then looked at those who retired at 55 and were still alive at 65. They also had shorter life expectancies than those who retired at age 65.
Those in the managerial and professional occupations at Shell suffered least by early retirement while those in skilled, semi-skilled, unskilled and clerical positions suffered most — they were 17% likelier to die young. But everyone gained by continuing to work. “Mortality improved with increasing age at retirement for people from both high and low socioeconomic groups,” the study found.
Work tends to keep us mentally and physically alert — gerontology research suggests we “use it or lose it” because people have a reason to get up in the morning, to look after their health and to maintain their social contacts. According to Carole Dufouil, director of research in neuroepidemiology at INSERM at France’s Bordeaux School of Public Health, each additional year of work lowers our risk of dementia by an additional 3.2%. “All other risk factors being equal, those who retired at 65 years old had a 14.6% lower risk of getting dementia than those who retired at 60 years old,” she explained.
Gallup’s Employee Engagement studies provides other insights. “The percentage of U.S. workers who are still in the workforce begins to drop steadily after age 60, but those who continue to work are more likely to be engaged — involved in and enthusiastic about their work and more productive members of their workplace — than younger workers.” This applies to today’s baby boomers and even more so to those older still, leading Gallup to conclude “employee engagement increases with age, even well into workers’ 60s and 70s. Half of the baby boom generation plans to work past age 65, 10% of them plan to never retire. This is good news for employers as well as for the engaged workers who “tend to have higher well-being, better health, and higher productivity.”
A society that celebrates the end of work — that gears itself to the day people stop being engaged in their life’s work instead of orienting itself to ever-improving the quality of work — harms its own wellbeing as well as that of the individual. Yet not only do we celebrate it, we enforce it through perverse government policies, such as forced savings for pensions. Those forced savings, which encumber us from Day One in the work force, divert money from what would otherwise be preferred uses, whether investments in a new house or in starting a business. The pension creates for us a dead asset we may never need instead of a living tool that empowers us. To compound the harm, employers are also forced to contribute to these dead assets, dragging them down, too, sparing no economically productive sector of society.
At one time, perhaps, pensions had some logic — when labour was mostly manual and people, unable to work in their later years, needed help. Even then, pensions were designed to kick in only at average life expectancy. Today pensions are too-often pogey, payments available two decades before we’re expected to die, and when we’re fitter than ever, and better able to work than ever. In today’s service economy, physical labour is rarely required and even in occupations where it remains indispensable — trades such as carpentry — older workers can parlay their years of experience by becoming foremen, consultants and salesmen.
Not everyone likes to work forever — Gallup surveys show almost one sixth of us are “actively disengaged” in our occupations, and would love to retire early on someone else’s dime. But that one-sixth is also “actively disengaged” long before retirement age. There would be a logic in subsidizing their retirement at age 35; it’s the same logic as subsidizing their retirement at age 65, which is to say, no logic at all.
Some people cannot work because of a disability, in which we could also include what’s known as “old age.” These people should not get a publicly mandated pension either; they should get what are properly seen as disability payments, even if they remain called “pensions.” Unlike the pittance we now provide, these payments could be more generous because society could better afford them, and they would also be less common, because the general health of the population would improve.