What is the Average Retirement Age….and a Surprise

by Neal Frankle, CFP ®

You might ask “What is the average retirement age?” But I’m going to go out on a limb and suggest that you really want to ask something very different. I’m going to answer your first question of course. But then, with your permission, I’d like to discuss the issue that I sense is really burning inside you.

What is the average retirement age?

To get this information, I visited the Center for Retirement Research at Boston College* website. According to this site, the average retirement age for men declined to about 62 from 1962 until about 1994. But from 1995 through 2010 the retirement age for men increased to age 64.

For women, the situation looks worse. The average retirement age rose from 55 in the 1960s to 62 by 2010. However, this is skewed because the ranks of employed women grew substantially during that period. One thing we can say for sure is that men and women tend to retire on average at about the same age these days. Now that you have this information, what are you going to do with it? Nothing I hope.

Why Average Retirement Age Doesn’t Matter

First, the statistics I quoted above simply mean that above those ages (64 for men and 62 for women) the participation rate in the workforce drops below 50%. But that still means an awful lot of men and women are employed way past age 62 and 64. It’s common to see people in their 70s at work. No big deal.

Second, when you ask about average retirement age you are comparing yourself to others in a way. You are comparing where you stand in relation to others. Right?

When you do that, it’s almost never helpful. There will always be someone who has more money and who will retire sooner than you will. And there will be tons more people who have it worse than you. Decide if you want to feel like a success or a failure and then look for data to prove your point. You’ll find it and you’ll feel either good or bad. You choose. That’s why I don’t encourage you to compare yourself to others – even though most everyone I know does so (including myself in weaker moments……)

The Real Nitty Gritty

Even though you may ask what the average retirement age is, my guess is that you really want to know if you are on track with your own retirement. Am I right?

This is a far better question. The answer of course depends on when you want to retire and whether or not you will have enough money to do so.

When Do You Want to Retire?

Not everyone wants to retire at the same age. You might love your job and want to stay onboard as long as possible. Or you might want to retire immediately and be willing to reduce your retirement standard of living in order to do that. Everyone’s situation is different so comparing yourself to others is really not going to be productive for you.

Will you have enough money to retire when you want to retire?

This is the key question you have to answer for yourself – not for others. And as I’ve written before, the best way to answer this is to create a plan. Don’t worry. It’s not as terrible as it sounds. You can even create a financial plan yourself for free if you like.

In your plan, you’ll consider:

a. When you want to retirement.

b. What your retirement income sources will be.

1. Will you have pension income?
2. Are you going to maximize Social Security Income benefits?

c. Will you have the right investments to create retirement income?

d. How much will you spend in retirement?

These 4 elements determine your retirement success – nothing else matters. Knowing the average retirement age might be interesting but it’s not useful to you as far as I can see. In fact, it can be down right harmful in many ways.

Do you have a different opinion? Do you think about the average retirement age? If so, how is this useful to you? What am I missing?

*CRR Website

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