Consider the changes in retirement between you and your grandparents. When the national retirement age of 65 was established for the Social Security Act in 1935 (78 years ago!), the average American lifespan was 61.7 years. The age of 65 was chosen at that time because it was beyond the average life expectancy for Americans. While there certainly were exceptions, most Americans of 1935 aged 65 or more were in poor physical condition and were unable to earn a living. In fact, the average 65-year-old American of those days was... DEAD!
Again, I am talking about averages. We all know of exceptions, but financial planning by the actuaries at the Social Security Administration is based on averages.
NOTE: Actuaries are the individuals who determine the rate of accidents, sickness, death and other events, according to probabilities that are based on statistical records. Actuaries then use trend information to predict future averages.
Today, we still think of retirement age as 65, but the average lifespan of Americans is now 78 years — 16 years more than it was when Social Security started. The impact is enormous.