We examined trends in severe functional limitations among working and non-working adults in Germany (ages 40–65). Four population-based samples of 11,615 participants were used, spanning the time periods 2002–2021. The overall prevalence of severe limitations was found to be 12.8% in the sample, but also varied from 10 to 20% according to occupational group. Over time, severe limitations were found to have increased, from 10.6% in 2002 to 13.2% in 2021. Logistic regression analysis showed that severe limitations increased significantly in certain subgroups, including working women with a low skilled white collar occupational group, working men with a low skilled blue collar occupational group and, particularly, among the whole non-working population, whereas limitations remained largely the same in the other groups, including most of the working population. In terms of expectancies, overall working life expectancy increased. Along with this increase, healthy (non-severely limited) working life expectancy increased, but this trend was accompanied by a clear increase in unhealthy working life expectancy (severely limited). Thus, although severe limitations have increased in some groups in the working-age adults, people today can expect to work more years free from severe limitations than before. In the future, potentials to increase working life expectancy may come to an end, as severe limitations increased strongly in the non-working population, which could limit the prospects for a further increase in the proportion of the population in employment. Further studies are needed to investigate the potential impact of the increasing prevalence of severe limitations on the population’s ability to work.