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The Changing Landscape of Retirement Age

The Changing Landscape of Retirement Age

Retirement is a significant milestone in one’s life, and the age at which individuals choose to retire can vary greatly. While there is no one-size-fits-all answer to the question of when to retire, understanding the average retirement age can provide valuable insights into current trends and help individuals make informed decisions about their own retirement plans.

Determining the average retirement age is a complex task, as different data points and definitions of retirement can result in varying ages. However, by examining various sources and studies, we can gain a deeper understanding of retirement trends in today’s society.

According to data from the Social Security Administration, the most popular age to start taking Social Security benefits in 2022 is 66 for both men and women. This marks a shift from previous years when the majority of individuals started benefits at age 62. However, it is important to note that there are notable outliers, and the average retirement age can range from around 57 to 67 depending on how it is measured.

Let’s take a closer look at the breakdown of when people start Social Security benefits, listed in order of popularity. The most popular age is 66, which is the full retirement age for most people. At this age, individuals can receive their benefits without any reduction. Approximately 28.4% of men and 26.5% of women choose to start their benefits at this age.

Age 62 is now the second most popular age to start benefits, with 22.99% of men and 24.5% of women opting for this early retirement option. It is interesting to note that in 2014, a significantly higher number of individuals, 34.5% of men and 39.7% of women, started their benefits at age 62. This suggests a shift in retirement patterns over the years.

Ages 65, 67, 68, and 69 each account for approximately 13-15% of individuals who start their benefits, while ages 63, 64, and 70 and above are the least popular start ages, with only around 6-9% choosing these options.

Apart from Social Security data, self-reported retirement age surveys also provide valuable insights. According to a recent Gallup survey, the average reported retirement age is 61, which has increased from 59 at the start of the 2000s. Additionally, the target retirement age for non-retirees has risen from 60 in 1995 to 66 today. These findings suggest a trend of individuals working longer before retiring.

To gain a more objective measure of retirement age, researchers at the Center for Retirement Research (CRR) at Boston College define the average retirement age as the age at which labor force participation drops below half. By this measure, the CRR estimates that the average retirement age is around 64 for men and 62 for women. However, it is important to note that this measure does not exclude individuals who are not meant to be in the workforce, such as homemakers and the disabled, which can skew the numbers younger.

Another approach to measuring retirement age is to look at the age at which half of the nondisabled workforce has exited the labor force. According to the Economic Policy Institute (EPI), this measure places the average retirement age at 65.5.

Retirement ages can also vary significantly across different states in the United States. Using U.S. Census Bureau data, it has been found that some states have lower retirement ages, while others have surprisingly late retirement ages. Factors such as job availability, population health, income levels, and the cost of living contribute to these discrepancies.

Looking beyond the United States, retirement ages around the world exhibit similarities, albeit with a broader range. In countries like China, women retire as early as 50, while the overall average retirement age is 54. Other countries with relatively low retirement ages include Russia (56.5 for women), Indonesia (58), and the Philippines (60).

Understanding the average retirement age and the various factors that influence it can help individuals make informed decisions about their own retirement plans. It is important to remember that retirement is a personal choice, and what works for one person may not work for another. By considering individual circumstances, financial goals, and personal aspirations, individuals can navigate the retirement landscape with confidence and plan for a fulfilling future.

Source: New Retirement