What Is the Average Retirement Age in America?

According to the U.S. Census Bureau, the average retirement age in America is 62, and the average length of retirement is 18 years. The first number has continued to decrease for nearly 100 years, while the second number has gradually increased. Retirement as we understand it today is a creation of the modern world. As always, retirement is an individual decision that should not be affected by others.

Significance

The average retirement age is affected by a number of factors that are not readily apparent. The number includes parents who decide to leave the workforce after having children. It's also significantly affected by legal requirements for many government employees to retire at a certain age. In addition, this age is partly affected by the age at which Social Security payments start coming in, which, for most workers is 62. In the coming years, however, the age that those payments start coming in will gradually increase for people born after 1938 up to 67 for people born after 1959.

Function

If the age of retirement does indeed increase, it would be a reversal of a trend that has held steady for approximately a century. There are a few potential reasons for this. One of them is the marked increase in the proportion of elderly people relative to the rest of the population. As these people age and retire, younger workers will need to work for longer and retire later to provide the support that retired people take in from government programs in the form of taxation.

Features

Raising the retirement age is an established cost-cutting fiscal policy internationally and in the United States. As the budget for Social Security and other government programs that disproportionately benefit the elderly increases, increasing the retirement age is one of the most politically palatable methods for reducing the amount of money that the government pays out in benefits without actually cutting programs. This will likely have the effect of making more people work for longer than they would otherwise, since it reduces the incentives for retiring.

Effects

The effects of an increase in the average retirement age are a bit unpredictable, because it has not happened in the United States as long as these statistics have been collected. It's likely that it will reduce wages and increase unemployment, because a higher available supply of labor has a consequent depressing effect on the price. One natural pressure that may increase retirement age is a higher prevalence of health among the elderly. Superior pharmaceuticals and better education about health are available now, making it possible for people to live longer, healthier and more energetic lives.

Considerations

Ultimately, it's difficult to predict what direction the average age of retirement will move. Despite the strong pressures created by governmental retirement incentives and disincentives, there are many other factors affecting this massively consequential decision. For individuals, choosing when to retire is one of the most important decisions that they make. There has also been a considerable growth in quasi-retirement, in which people significantly reduce the amount of time that they work or choose to become independent contractors or consultants as they ease their way into retirement.

References

• ElderWeb: Retirement Ages Over the Years

Resources

• U.S. News and World Report: Raising the Retirement Age
• Social Security: Retirement Age Increase