Who's better off -- today's retirees or yesteryear's?
Retirees who think prior generations had it better than today's most likely don't realize just how good they've got it. That's one of the conclusions you could draw from a fascinating report prepared by United Income titled "The State of Retirees: How Longer Lives Have Changed Retirement."
It compares the health, wealth and daily life of current retirees to those from the 20th century. Here are some of the intriguing findings:
- The average remaining life expectancy for 60-year-olds has increased by almost nine years since 1900. This means many of today's retirees would no longer be alive if they lived the average lifespan of prior generations.
- In addition to longer lives, 62 percent of current retirees are without physical or cognitive limitations, an increase of 25 percent since 1963. Almost three out of four of today's retirees report they have no difficulty walking one-fourth of a mile and that they're in good or excellent health. Even more report they have no difficulties remembering.
- The percentage of retirees who are living on the equivalent of the minimum wage has dropped from 28 percent in 1989 to 15 percent in 2016.
- The median amount of wealth held by retirees, expressed in 2016 dollars, has increased from $134,995 in 1989 to $206,600 in 2016, an increase of more than 50 percent. The average wealth has increased even more, from $359,307 in 1989 to $752,333 in 2016, an increase of more than 100 percent.
The United Income report is consistent with studies produced by the Stanford Center on Longevity (SCL). For example, according to SCL, the average length of retirement for men in 1950 was eight years, increasing to 19 years by 2010. In 1959, roughly one-third of people age 65 and older lived in poverty. The United Income report shows this amount had dropped to 12 percent by 2016.
Here's even more good news: The average monthly Social Security benefit was $29 in 1950. Adjusting for inflation, this amount would have about $248 of buying power in 2018. But in 2018, the actual average monthly Social Security benefit is $1,293, representing more than five times as much buying power as the 1950 Social Security benefit, adjusted for inflation.
In addition to bigger Social Security checks, current retirees are also benefiting when it comes to health care coverage. Before 1965, retirees had to pay for medical care out of pocket, and health care facilities were much more limited compared to today. Medicare was introduced in 1965, representing a significant positive contribution to the financial and physical health of Americans age 65 and older.
Many people might think nostalgically about the 1950s or before and long for the good ol' days, but the reality is that if today's retirees were transported back to then, they would feel deprived: working longer, in poorer health, dying sooner and owning, at most, one car or possibly none. With no cellphones, Facebook or Google, they would have a much harder time staying in touch with friends and loved ones, or even keeping up to date on current events.
Perhaps the longing for the 1950s is really the perception that people were generally leading happier lives back then. When we look back on that time, it often seems that people were more socially connected with their families and friends, were less stressed and were contributing more frequently and in a larger way to the greater good of their communities.
If that's what they're longing for, today's older workers and retirees can make that happen by learning from the past while seeking ways to improve the future. "Collectively, retirees have never had it better, with more health, wealth and time to enjoy life without the constraints of work," according to Matt Fellowes, CEO of United Income and co-author of the report. By focusing on what's really important, current retirees could improve their lives.
Of course, not every retiree is enjoying an improved experience today -- many older workers and retirees are struggling with their finances or health. But if we continue to focus on how to enhance the lives of all Americans, while celebrating the progress we've made so far, we can help improve life for everyone.
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View all articles by Steve Vernon on CBS MoneyWatch»
Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops
and authored Retirement Game-Changers: Strategies for a Healthy, Financially Secure and Fulfilling Long Life and Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck.
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