Cover image of Work, Retire, Repeat by Theresa Ghilarducci (2024) | Courtesy of University of Chicago Press
Time away from work is like water or the sun—a vital resource for human beings. As societies grow wealthier, their residents typically clamor for more time for leisure, more family and friends, sometimes education, and more self-care. In advanced market economies, government policy, trade union demands, and employers’ human resource management practices all play a role in permitting most workers to retire.
Retirement is conceptually akin to any kind of paid time off, such as paid vacation, sick leave, and, for salaried workers, the conventional weekend and an evening off. If we want an equitable society, we need to know if everyone gets this paid time off equally—presently, they don’t. To understand these inequities, we need to measure the amount and distribution of time off work. Who gets to retire and for how long? Only by measuring can we assess our nation’s progress toward equality of this important little-heralded resource, paid time off for life.
Wealth is associated with more time off. Nations and households consume more time away from sweat and yoke as they grow richer. The postwar growth in pensions and the expansion of Social Security, Medicare, and Medicaid diminished gaps between rich and poor. Stark differences in wealth, access to health care, and time off shrunk. The rich and the poor were confirmed social entitlement to a special kind of time—time that grows in value as it becomes scarcer when people approach their death.
I fear that American workers are approaching the end of their lives with more inequality than when they were working. For the first time in modern American history, gains in retirement time are concentrated at the economic top. Let’s set aside for now the political and philosophical questions of who deserves a healthy retirement, and what does it matter if only the rich can have it? This chapter measures the distribution of healthy retirement years—who gets how much paid time off in their final years.
People Have Very Different Retirement Lengths
There is considerable research on working time, but I’ve yet to see any on the duration of people’s retirement time. Few scholars even try. Luckily, Alicia Munnell, director of the Center for Retirement Research at Boston College, is trying. I am highlighting her work because I trust her numbers and her compassion for the human side of retirement and work.
But Munnell stresses the financial benefits of working past age 65. I get it: I didn’t protest when my mother stayed in her job selling classified ads until age 72. But now, I cringe when I think of her getting up so early to beat a grueling commute and the several car accidents she had. Her pay was less than $32,000 per year (in 2007), and she collected Social Security as soon as she could. As I first wrote this chapter, my mother was 83 and a bit sick; I hoped she would get twenty years of retirement life. She died at 84, with just twelve years of it. Was that too much?
In Alicia’s eagerness to sell the idea of working a few more years, she insists that today’s normal life cycle is to work forty years and retire for twenty. She hints that one retired year for every two working years is unacceptably generous given historical ratios of three years to one. If people were to push back their retirement age by four years, Munnell argues, they would work forty-four years and retire for sixteen, presumably more acceptable because this mirrors historical ratios. Put that way, it may sound logical to trim the ratio, meaning work longer. On its own, this assertion about the ratios may seem obvious. After all, many of us know people who worked for thirty years and lived another thirty years in retirement. But new data just don’t bear this out as common—in fact, quite the contrary.
Munnell, in making her moral argument, proposes that in the name of moving forward, we go back to the past, when we all worked for a greater proportion of our adult years. Back in the 1940s, Munnell implies, the US achieved the “right” ratio of work to retirement years, four to one. As the US and other developed nations grew, richer workers demanded and received more paid time off: vacations, holidays, sick leave, family care, and retirement. But there is no precedent in social policy making to argue for conditions that were in place when a nation was poorer, so why go back to that era’s retirement levels. Munnell’s assertion overlooks inequalities set in place by working-longer policies: better-off folks who live longer may not lose retirement time, but lower-income people who did not benefit from longevity gains most certainly do.
Facts about retirement length are hard to come by, inspiring me to open a new path of research, the results of which are in this chapter. I unfortunately have found much shorter averages than the twenty years Munnell found. It’s also important to move beyond those averages and glean the distribution of retirement—this is the equity question of who gets the precious resource of time for their own actualization before they die and who does not.
The inequality of retirement time is caused by the crossing of two swords: growing inequality in retirement wealth and growing inequality in longevity. These inequalities are deeply connected. If people who died sooner had retired earlier than those with longer and healthier lives, then retirement time could be distributed more equally. Retirement trends depend on trends in retirement ages and length of life. But simply subtracting average longevity from average retirement age gives a distorted impression because both are unequally distributed, so we must go deeper and look at retirement ages and longevity by race, class, and gender.
As far as I can tell, my study of retirement time is the first of its kind, which is surprising: time is precious and universal. This is likely because no data was previously available on this. To really get at this question, researchers need to know a lot about people when they retire—jobs, health, wealth—and when people died and how sick they were when they retired. The state-of-the-art Health and Retirement Study (HRS) from the University of Michigan has that data, but collection started only in the 1990s. In the past few decades, there were not enough people who had retired and died (ghoulish but a research reality) to get a large enough sample to determine the characteristics of who and who did not get a healthy and fair amount of retirement time.
By 2018, enough people in the HRS database had died that we could begin exploring and learning. My coauthor Anthony Webb and I constructed a sample of people to figure out who had lived for how long and how healthy they were after they withdrew from the labor force.
Here are a few kernels from our findings: Men are more likely than women to die without retiring. Black women spend the most time in retirement sick. If men have a defined-benefit (DB) plan, they catch up with women in retirement time. Higher educational attainment helps women obtain more retirement, although men with higher socioeconomic status have more retirement time than do women with less education.
One significant reason men have less retirement time than women is straightforward: over time, private employers have replaced DB pensions—the usual ones we think of, the kind that pay out benefits for life—with 401(k)-type plans. Among men with low levels of formal education, not having a DB plan makes them more likely to delay retirement, especially while they are still healthy. With so many different types of retirement plans out there, Social Security options, and flexible retirement dates, policy makers and academics hoped that people with shorter life spans could compensate by being able to retire earlier. Increasingly, they can’t, because they lack secure DB pensions. Given current patterns and trends, access to retirement time (and healthy retirement time) is likely to become more unequal as pension wealth and longevity inequalities increase.
Retirement Ages Are Unequal
The story of Americans working longer at older ages is one of vastly divergent realities. Alongside the happy, healthy 75-year-old pediatrician who chooses to work is the 75-year-old janitor with ailing joints who must work for money to survive. The Black construction worker with a chronic sore back leaves work at age 61 and struggles until he can collect Social Security, while the college-educated white woman came late to accountancy at an auto parts firm, loves it, and retires happily at 75. The average retirement age—64.4 years for men and 64.2 years for women—doesn’t give that rich detail. The real story of retirement and the quality of elder life lies in the distribution of retirement ages.
The economist Courtney Coile’s effort and others to discover why Americans are, on average, retiring at later ages is a good place to start telling the story of American retirement behavior. Coile analyzes all the imaginable push and pull factors that encourage older workers to work longer. Better health had a negligible impact on whether Americans work longer, which surprised most of us in the field. Being able to work longer did not pull people into longer work lives. One reason health does not appear in the data to be a crucial factor driving people to work is that healthy people like to retire—health makes retirement more fun. Push factors, such as workers having risky types of retirement accounts—more 401(k)s and fewer defined-benefit pensions—and many workers not even having a pension or 401(k) account, are significant factors in Americans’ later retirements. Pull factors such as the elderly being more educated and having a spouse who works also helped explain the increasing average retirement age.
The problem is that attempts to reckon with why people retire at the age they do tend to assume that individuals have control over when they retire. The methodology of these studies is such that employers’ priorities—their needs, habits, and power—are not considered by the model, although what employers want is germane to a person’s retirement decision. This is a huge oversight. But many noneconomists are discovering something that may seem obvious: the quality of the job a person has when they decide to retire or when their employer decides they should retire is a key factor explaining the age at which that person retires. Employer actions, including outright age discrimination, workplace speed-ups—efforts to make workers work faster—and pressuring older workers to retire, must be part of the retirement picture. Most retirees tell researchers they are directly or indirectly pushed out of work because of a lack of training or microaggressions around age discrimination, or they are laid off. This complex, contested terrain of employers’ priorities is a major factor driving who retires, when, and how.
Let’s shift our retirement lens away from averages to focus on inequalities by race, gender, and class. How do these inequalities shape who gets to retire and when? Analyzing who identifies as men and women separately (the existing data set requires people to identify as male or female, or the surveyor does it for them; these binary categories are clearly a limitation that must be rectified in modern research). To discern people’s class status, we use their highest level of educational attainment. We use non-Black and Black because there are too few people in the other categories who have retired and died for us to be able to make meaningful inferences about class and health impacts.
Since people retire at about age 64, gender on its own does not explain differences in retirement time. However, when we dig into some nuances, we find subtle yet significant differences. For instance, even though they live longer on average, women do not automatically get more retirement time. Many men retire early, and upper-class men have the same life expectancy as women. Don’t ever be fooled that class can overcome many other differences.
People in the lowest third of educational attainment for their age group retire earlier, at about age 63. Men and women in the highest third of educational attainment retire later—close to 66 for men and 65 for women. As a rule of thumb, those in higher socioeconomic classes work longer. In other words, while gender affects some layers of the retirement picture, class makes a bigger difference. The Health and Retirement Survey, with its extensive information on life and work histories and age of death, allows me to limit my analysis to those who worked most of their adult life and lived until age 52. This older worker sample lets me examine the effects of class, race, and gender on retirement time.
What did I find? Race, independent of class, significantly affects the age at which someone retires. Black men retire earlier. Non-Black people—controlling for education attainment—retire at older ages than Black people. The average retirement age for Black men is about 63, and for Black women it’s a year older. Non-Black men work more than two years longer than Black men; meanwhile, non-Black women retire at almost one year older than Black women. But I don’t really care about retirement ages by themselves; I’m interested in retirement time. I hope to live in a nation where people who die earlier get to retire sooner.
Reprinted with permission from Work, Retire, Repeat by Teresa Ghilarducci, published by the University of Chicago Press. © 2024 by The University of Chicago. All rights reserved.
