Mortality Postponement, Mortality Compression and Successful Retirement

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The Wharton School::Wharton Pension Research Council::Wharton Pension Research Council Working Papers
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Economics
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Healthy aging
succesful retirement
longevity perception
mortality compression
mortality postponement
historical population mortality
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2025
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David McCarthy
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Abstract

A key issue in planning a successful retirement is whether mortality at older ages is being compressed (i.e. whether more individuals are reaching older ages, but mortality at the oldest ages is broadly unchanged), or postponed (i.e. whether more individuals are reaching the oldest ages, but mortality at these ages is falling). We analyze historical period population mortality in industrialized countries between 1959 and 2019 and show that compression accounts for around two thirds (depending on sex and country) of the increase in the median age at death, while postponement becomes increasingly dominant at higher percentiles. One implication is that while the savings target needed to ensure a successful retirement at the median has increased dramatically, the increase at the 95th percentile has been much more modest: retirement savings targets have increased with increasing longevity, but the required margin for longevity risk in these targets has decreased both in absolute and in relative terms.

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WP2025-06
Publication date
2025
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