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One of the most difficult challenges facing hopeful retirees is their own increasing longevity. While living a long life is positive on the surface, it throws a monkeywrench into both personal retirement accounts and national entitlement programs.

“It has been argued that babies born today will very likely live to be 100 or beyond. And it’s not really getting into science fiction; it already is fairly probable,” says Mitchell. “If you have good health care and take care of yourself and semi-decent genes, you may very well be able to live to over 100.”

That, of course, means that workers retiring at age 65 can face the prospect of needing to save money for 35 years or more.

“It’s very, very, very expensive to live to be 100 or 120 years old,” says Mitchell. “And with medical care costs going up faster than the rate of inflation for the last thirty years, the medical uncertainty associated with retirement is growing much, much greater as well.”

Saving for so many years is so difficult, says Mitchell, that retirement as we know it may simply cease to exist.

The Benefits Of Not Retiring

Not that that’s a bad thing. In fact, not retiring can be a rosier idea than spending your days on the golf course.

“There’s evidence that suggests that people who keep working are healthier, happier and better adjusted,” says Mitchell.

Some critics contend that older workers remaining in the workforce prevents younger job seekers from finding opportunities. That concept is known as the “lump of labor fallacy.”

There’s this idea that there are only a certain number of jobs for a certain number of people. Obviously that’s just not true,” says Mitchell. “We can see it in the US economy over time: When women entered the labor force after they had the Baby Boomer babies, the labor force expanded, productively, to take them all in and do better.”

“In countries where you have the youngest retirement age, you also tend to have to have the highest taxes to be able to support the elder generation. High taxes tend to create a disincentive for employers to hire, tend to raise unemployment rates and so forth and so on.”

Investing For Retirement

Mitchell’s Pension Research Council has been researching the effects of the 2008 financial crash on retirement accounts, looking to see how the bust changed investor behavior. That picture isn’t rosy either – decreasing consumption in all age groups, reluctance to invest in the market, concern about what the future may hold.

“We’ve developed a simulation model, inputting all of the parameters that we think are reasonable in terms of people being able to adjust their work hours, their retirement patterns, their investment portfolios and so on. And what we predict is that people who are in their fifties today are going to suffer a prolonged decrease in consumption – not just short term, but for the rest of their lives,” says Mitchell.

“Younger people, in their twenties, have at least a good shot at making up the shortfalls, both by working more when the economy does recover and maybe by pushing back their retirement age somewhat. But people who are right on the edge of retirement age – fifties and early sixties – I think they’re in much worse shape. “

Not a pretty picture, but perhaps a realistic one.