The average retirement age in the United States is 62, according to new research from the Transamerica Center for Retirement Studies. Almost six in ten retirees stepped away from the workforce earlier than anticipated, often due to medical issues limiting their ability to continue. “Many of them are financially precarious. If they were to face a major financial shock or a decline in health requiring long-term care, they would struggle to afford it,” said Catherine Collinson, CEO and president of the Transamerica Center for Retirement Studies.
The research corroborates previous findings by the Employee Benefit Research Institute, which reported earlier this year that the median retirement age for Americans is 62. This gap between expectations and reality is significant, as policy experts often urge Americans to work longer to save more for old age — a strategy that frequently does not materialize.
“This is a cautionary tale for people currently in the workforce. Maintaining health, keeping skills current, and staying informed about retirement and financial planning while saving consistently is crucial,” Collinson advised. Retiring earlier than expected may explain why millions of Americans claim Social Security before reaching “full retirement age” — the age at which they receive full benefits.
Experts recommend delaying Social Security claims as long as possible to maximize benefits.
Retiree struggles and satisfaction explored
Workers can start collecting as early as age 62, but this results in a 30% reduction in monthly checks compared to waiting until full retirement age, either 66 or 67, depending on their birth year.
According to a survey of more than 2,400 retirees by Transamerica, the median age for claiming Social Security benefits is 63. Only 4% of retirees wait until age 70 to maximize their benefits, which boosts monthly payments by more than 30%. “Understanding their benefits and exploring options to stretch those benefits is crucial,” noted Collinson.
For instance, in a spousal situation, one spouse could claim early while the other delays. Alternatively, they could rejoin the workforce temporarily and pause Social Security to increase their future payments.
Another reason for early Social Security claims is insufficient retirement savings. Only about half of U.S. retirees participated in a 401(k) or similar plan during their careers, and more than one in four reported their employer never offered retirement benefits. Despite these challenges, many retirees report satisfaction in retirement.
Nearly 9 in 10 describe themselves as generally happy and maintaining close relationships with family and friends. “Retirees are really enjoying their time in retirement, which bodes well for all of us,” Collinson said. “They’ve made adjustments, primarily financial, but overall are doing well.”
Cameron is a highly regarded contributor in the rapidly evolving fields of artificial intelligence (AI) and machine learning. His articles delve into the theoretical underpinnings of AI, the practical applications of machine learning across industries, ethical considerations of autonomous systems, and the societal impacts of these disruptive technologies.
