The life expectancy of Americans has improved markedly since World War II. Although longevity gains slowed a bit in recent decades, they still have been substantial. An American aged 65 in 1998 could expect to live 82.3 years. That’s almost 2.5 years more than in 1974, a 16 percent increase in life expectancy beyond age 65.Many people assume that a longer life means a longer period of retirement. Retirees may continue to work for pay, maybe even in a new career. Still the widespread belief is that this will be done voluntarily, not out of necessity.Most workers, however, may have no choice. More work might be the only way to make ends meet. Unless a major shift in recent economic trends occurs, the average American turning sixty-five now will have to work more than 30 percent longer to get the same private sector retirement income that a retiree had in 1974. Because longevity has gone up only 16 percent, that means older Americans can expect a 14 percent decline in leisure time.A main reason why longer lives may be accompanied by less retirement is that pensions and retirement assets are eroding, not growing. And this trend began even before the collapse of Enron and the recent rash of corporate accounting scandals; it was true even before the bursting of the late-1990s stock market bubble.America’s future doesn’t have to be one in which longer lives mean simply more work. In the wake of the Great Depression, government, business, and labor representatives forged an informal yet very real social contract on retirement security. For decades, that contract shaped the length of time for which workers could expect to retire. A national dialogue is now needed to fashion a new social contract.
