As America’s population ages and questions over Social Security’s financial health persist, the issue of retirement age remains a subject of public policy debate. The issue also has a personal health dimension. It has long been believed, but unproven, that early retirement can be detrimental to one’s cognitive function, whereas a longer working life has been thought to promote healthy brain function.
Retirement planning decisions are growing increasingly complex in America, and older workers are facing critical financial choices in the latter years of their professional lives. Making optimal choices, however, requires an increasing level of financial literacy and knowledge.
In the United States, the majority of retirement savings are invested in equity — shares in publicly traded companies. Traditionally, high average returns have offset the inherent risks of investments in stocks, but that equation changed following the recent financial crisis. In the past three years, the value of equity has declined, growth has been sluggish and many forecasters have continued to predict low returns from stocks in the coming decade.
In the United States, 85.6% of those 65 or older receive most of their income from Social Security. Certain groups of individuals, however, are significantly less likely to collect benefits. This poses a significant challenge for policymakers and others concerned with the well-being of the country’s aging population.
