The estimates in this paper suggest a large and statistically significant relationship between subjective life expectancy and retirement expectations: an individual who is one standard deviation more optimistic about living to age 75 has a greater probability of planning to work fulltime at 62 and 65 by 10 percent to 21 percent, respectively. Respondents who are more optimistic about their survival to age 75 or 85 also expect to work five months longer on average. We also find that increases over time in subjective life expectancy for a given individual are associated with increases in his planned retirement ages and expectations of working at older ages. Finally, actual retirement behavior also increases with subjective life expectancy, but the relationship is somewhat weaker. The results further our understanding of how survival and retirement expectations are “anchored” to the previous generation’s experience and suggest how targeted efforts at increasing knowledge about rising life expectancy may increasethe proportion of younger cohorts who decide to work longer.
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