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Are you healthy enough to delay retirement?

"Work longer" is becoming the new retirement strategy, as more and more people report in surveys that they intend to continue working to age 70 or beyond. Working longer has a few powerful financial advantages: It gives you more time for your retirement savings to grow, you'll earn a higher Social Security benefit if you delay claiming it and you may be covered by health insurance at work.

But this strategy raises the question: Will you be healthy enough to work?

Record number of Americans draining retirement accounts 03:01

A recent article in the Journal of Gerontology titled Heterogeneity in Healthy Aging provides us with some insights into this critical question. Researchers from RAND, University of Illinois, Stanford University and University of Southern California have found that a significant proportion of older Americans, including those age 85 and older, are healthy. The report relies on information from formal surveys where individuals self-report their health status.

Let's get into some details. For starters, a substantial proportion of the older population reports their health as "excellent" or "very good":

  • 45 percent of those aged 60 to 64
  • 42 percent at ages 65 to 69
  • 38 percent at ages 70 to 74
  • 33 percent at ages 75 to 79
  • 30 percent at ages 80 to 84
  • 28 percent at ages 85 and over

It's probably accurate to assume that people reporting their health as "excellent" or "very good" would be able to work in some way.

Next, the researchers looked at the proportion of survey takers who didn't report needing any help or assistance with activities of daily living (ADLs) or instrumental activities of daily living (IADLs). These are fairly low bars of health status. ADLs include bathing, dressing or getting around the house. IADLs include using a phone, paying bills, taking medications, preparing light meals, doing laundry or going shopping.

A very high proportion reported needing no help with ADLs or IADLs:

  • 96 percent of those aged 60 to 64
  • 95 percent at ages 65 to 69
  • 91 percent at ages 70 to 74
  • 88 percent at ages 75 to 79
  • 79 percent at ages 80 to 84
  • 56 percent at ages 85 and over

It's probably safe to assume that some of these people may not be healthy enough to work, even though they don't need help with ADLs or IADLs.

The next category was the proportion who reported no health-based limitation in work or housework. Once again, a significant proportion reported no limitations:

  • 85 percent of those aged 60 to 64
  • 85 percent at ages 65 to 69
  • 81 percent at ages 70 to 74
  • 77 percent at ages 75 to 79
  • 71 percent at ages 80 to 84
  • 56 percent at ages 85 and over

It's entirely possible that some of the people who didn't report their health as "excellent" or "very good" in the first analysis described above are nevertheless healthy enough to work in some way, as reported in this last analysis.

Based on this data, it's probably safe to say that roughly eight out of 10 people in their late 60s are healthy enough to work in some capacity, roughly three-fourths of people in their 70s could work and maybe half of those in their early 80s could work. So, the "work longer" strategy might be physically possible for large numbers of older people.

Of course, many questions still need answers. For instance, would you still want to work in your late 60s, 70s and even 80s? My suspicion is that many people who respond to surveys by saying they expect to work until age 70 or beyond haven't really thought through the implications of that decision.

Of course, the "work longer" strategy has another challenge: Can you find work in your retirement years? With so many issues involved, that's a question for another day.

"Work longer" isn't really a retirement plan or strategy. Until you actually plan for it, it's only a hope -- and hope is not a good strategy! To turn that hope into a plan, you'll want to take steps that allow you to keep working, including caring for your health and figuring out how you'll find a job in your later years.

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