By Bloomberg News Wealth + Equality
Feb. 15, 2023
Pretty much everyone dreams of a long, healthy retirement. Your chances of achieving it, though, vary dramatically.
If you make it to 60-years-old, in some countries like Mexico, Colombia and the United States, on average men can expect only a healthy decade — or less — in retirement. Whereas in the likes of France and Luxembourg, men can look ahead to over 18 healthy years in retirement, according to Bloomberg News calculations.
Countries everywhere, though, are battling the same dilemma. As life expectancy rose, governments started to push people to stay in the workforce for longer. Yet healthy life expectancy — the average number of years a person can expect to live in good health with no major disease or injury — hasn’t increased at the same pace.
Here is how the situation stacks up in Organization for Economic Co-operation and Development members — some of the world’s major economies:
In 2019 — the latest period for which comparable data are available — the average life expectancy at 60 for men in OECD countries was 82 years. The average effective retirement age, which is when someone exits the workforce as opposed to the official state pension age, was 64 years.
How long people actually spend in retirement varies by country. The effective retirement period ranges dramatically for men from 12.9 years in Mexico to 23.3 years in France.
The other important comparison is healthy life expectancy – that’s the amount of time you may have in good health. This healthy retirement period ranges from 7.7 to 18.5 years.
The situation is slightly better for women as they generally live longer. On average, women in OECD countries spend around 22.8 years in retirement, though a third of that time could be spent in ill health.
The fear for many is that retirement in the future may not be what it was. Retirement length has started to flatline — or even dwindle in some countries — as the pace of life expectancy increases slow and the effective age of retirement gradually increases.
Indeed, the number of healthy retirement years has already shrunk on average. In 2019, women could expect 16.4 years of retirement in good health, down 1.4 years from 2000.
All of this is before you consider the impact of the pandemic which decreased life expectancies in a number of countries. In the US, for example, it contributed to the largest decline since World War 1.
These, of course, are all averages. In reality individuals’ experiences will vary dramatically, with the wealthiest in each country typically enjoying better health later in life.
Unless health outcomes improve, as state pension ages rise there is the risk that this healthy period of retirement will get still shorter as people are forced to try and stay in the workforce longer.
And this analysis just looks at life expectancy for those who’ve reached the age of 60, and as such doesn’t include those who never made it to retirement at all.
The data are clear on one thing though: it’s pensioners in Western Europe who enjoy the longest, healthy retirement periods. The Americas, by contrast, have some of the shortest.
Data, graphics and development by Jane Pong, Yasufumi Saito and Adrian Leung
Edited by Emily Cadman and Ainsley Thomson
With assistance from Jin Wu and Spe Chen
Sources: World Health Organization, Organization for Economic Co-operation and Development, data compiled by Bloomberg
Methodology: To calculate length of retirement period, Bloomberg News obtained life expectancy and healthy life expectancy data from the WHO, and effective labor market exit age data from OECD. These were then combined for all 38 OECD countries.
As we focus on the retirement experience in this analysis, the data for life expectancy and healthy life expectancy are as of 60-years-old. That means those who die earlier are not included in the analysis. The healthy period after retirement is defined by subtracting effective retirement age from healthy life expectancy.
The dataset covers 2000, 2010, 2015 and 2019. The country comparison graphics in the story use the 2019 data.
© 2023 Bloomberg L.P.