What Factors Affect the Average Retirement Age?

Average retirement age to claim maximum US Social Security benefits is now set for most people at 67, but this is hardly the only factor that contributes to when people will retire. Though most may attempt to reach this age, others may begin claiming benefits without retiring or work longer to earn credits or increase their benefit level. Others may continue to need to work in order to augment skimpy benefits, and clearly the amount of additional money set aside for retirement may affect retirement age.

In a broad-based view, attitudes about retirement have certainly changed average retirement age. People in their 60s are not necessarily viewing themselves as ready to quit work. Age of children may have a lot to do with this. With more women having children into their mid-40s, retirement may seem premature when there are still young adults to raise or college educations to pay for. Costs for sending the average child to college usually can’t be met without continuing to earn money.

The issue of when to retire to claim Social Security has an important affect on average retirement age. People are penalized for claiming this benefit sooner (as early as 62), and this could definitely forestall age of retirement from work until the age of 67 is reached. Depending on how people have structured their lives, they may put off retirement too if they haven’t yet earned enough credits for Social Security. Some people haven’t, or want to add to their total social security benefit. The woman who spent most of her life as a stay at home mom is just one example that may fall into this category, or any person who has perhaps worked as an independent contractor and made very little.

Another part of the equation is the inadequacy of payments though Social Security alone. When people live solely on this amount, even if it is at the maximum level, it may frequently reduce quality of living or cause financial difficulty. In the financial crash of the late 2000s, many people who were close to retirement saw huge losses in their investments too, meaning they would have to continue to work because they no longer had the extra cushion they planned on for retirement. Things like declining home values also didn’t help, since many people had invested in real estate, or suddenly found themselves with mortgage levels that exceeded the value of their homes. When such financial difficulties occur nationwide, average retirement age tends to increase and though people may claim social security at the appropriate time, they also may plan to work.

Certainly in the late 2000s, the response for many was to resolutely forgo retirement and keep trying to work on saving adequate funds for the day when work could no longer be found or performed. There are many younger people who are already struggling with rising costs, and wonder if there will be such a thing as retirement: if ultimately, people will simply need to work until they can no longer do so. This thinking, if accurate, could correspond with a sharp increase in average retirement age. It is certainly obvious to most people, even 20-30 years away from potential retirement that an average retirement age may well become a relic of the past, unless people are able to save money now that will help meet the expenses of the future.