What is the average age for retirement—and is it right for you?

Do you wonder if you’ll be able to retire around the same age as your peers?

There are plenty of factors that affect the best age to retire, including family circumstances, amount of money saved, your health, and so much more. Let’s dig into the average retirement age and some research on how to determine the retirement age that might be ideal for you.
 

The average retirement age: Where it’s been and where it’s going

The average retirement age in the U.S. is in the low 60s, but different studies pinpoint the average age differently. A Gallup survey pegs the average retirement age at 61.¹ Other studies say it’s 62² or higher.³ A separate study found that men, on average, work about 2½ years longer than women.⁴

And if you think both men and women used to retire earlier than they do today, you’re right. Back in 1991, for example, the average retirement age was just 57.⁵

There are several reasons that age has been rising—and is likely to continue to rise in the years to come:

• Health and longevity. With continual improvements in medicine, people are living longer and healthier lives, which gives them the ability to stay on the job longer before they choose to retire. (Related: Why do women live longer?).
• Economic necessity. Living longer also means people have to plan for a longer retirement, and they need to work longer to save enough money for it. As the cost of living goes up, it puts continued pressure on older workers to work longer and save more.
• Changes to Social Security. The age to qualify for full retirement benefits under Social Security has also been on the rise, creating another reason to delay retirement. That reason may only grow stronger in coming years. To avoid the potential insolvency of Social Security in 2033, the government might raise the age for full retirement benefits even higher.⁶
   

 The retirement age that's right for you

Data on average retirement age can provide a useful benchmark for anyone contemplating retirement. But ultimately, your retirement plan should specify a target age that you and your financial professional agree is right for you. Here are some factors that can affect that decision:

• Financial readiness. You and your financial professional should evaluate all your relevant assets—such as savings, investments and retirement accounts—and then balance them against your anticipated retirement expenses to determine the age you can expect to retire.
• Health status. Consider your current health status and any changes you can anticipate. Your family history is another factor to think about. This information can suggest how long a retirement you need to fund and how long you should continue working to afford it. For more on health risk, get our free white paper research study on addressing health risk.
• Career satisfaction. Setting a retirement age has to do with more than when you can retire. It also involves considering when you want to retire. The more you like your job, the longer you may want to continue working, pushing off your target retirement age.
• Personal goals. Another determining factor is the kind of retirement you want. Frequent travel, second or third homes, and living in a high-cost metropolitan area all affect how much you need to save for retirement, and thus when you can afford to retire.
• Social Security benefits. The retirement age you choose can affect the size of the monthly Social Security benefit check you receive. The larger you need or want that income to be, the longer you may need to work before claiming Social Security benefits.
   

Want to retire earlier?

Although the average retirement age is around 62, you might have your sights—and your calendar—set for an early retirement. People do retire at age 60, 55, or even younger. But the ones who do so successfully generally follow an explicit and comprehensive early-retirement plan. That plan can include the following elements:

• Maximize savings. Save as much as possible. Take full advantage of tax-advantaged retirement accounts such as 401(k)s and IRAs. If you’re over 50, you may be able to save even more via catch-up contributions.
• Minimize expenses. One key source for increased savings is a reduction in your expenses. Cutting out small expenses, such as a daily cappuccino, can help. Cutting down on big expenses, such as moving to a more-affordable city or neighborhood, can help more.
• Increase income. Another source for increased savings is increased income. Advocate for raises and promotions at work, switch to a higher-paying employer, or even to a higher-paying career. Consider taking on an additional part-time job or your own business sideline.
• Optimize investments. Work with your financial professional to adjust your investment mix for returns that support your target retirement age. That can include rebalancing your current portfolio and evaluating new investment tools. It can also mean weighing the pursuit of higher returns against potential risks to your financial security.
• Reduce debt. Debt, especially high-interest debt such as credit cards and personal loans, is another obstacle to early retirement. That’s because every dollar you pay out in interest is a dollar you can’t invest in your retirement nest egg. Pay off these loans so you can focus on savings.
• Don’t forget health insurance. After your early retirement, you might no longer qualify for your former company’s health insurance plan, and Medicare doesn’t kick in until you’re 65. Plan to cover medical expenses in the meantime, perhaps through an individual policy or a group policy sponsored by a nonprofit association you’re a member of.

Understanding what’s been happening to the average retirement age can be useful information as you consider your own target retirement age. Even more important, the retirement age you decide on should be part of a personalized plan that considers your circumstances, goals, requirements and broader vision of retirement. Your financial professional can be an invaluable help in turning your goal into reality.