Why Do Average Americans Retire at Age 62 When Most Plan for 67?
Written by
Aja McClanahan
Edited by
Cory Dudak
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With so many Americans feeling ill-prepared for retirement, it only makes sense that many people believe they’ll retire later than sooner. Many people use the IRS full retirement age (FRA) — 65 for those born before 1960 and 67 for those born after — as a guide for retirement age.
Others may look at their employer’s retirement benefits based on years of service and/or age. Some of these timetables allow people to work well into their 70s, which makes sense because waiting to collect Social Security benefits at age 70 results in a higher monthly benefit amount. With those who could use the extra money and time, it can make sense to delay retirement–especially for those feeling unprepared.
Then, there’s the growing number of Americans retiring sooner than they thought — as early as 62, the minimum age the IRS allows people to collect Social Security benefits.
A Transamerica Center for Retirement Studies survey indicated that retirement-age workers are leaving their jobs sooner than anticipated. In this survey, 56% of retirees said they retired sooner than planned, while only 7% retired later than expected. Then, the survey indicated that 37% retired on their own schedule.
Another interesting aspect of this study is the number of survey respondents who retired during the pandemic. The report revealed, “More than one in five of the retirees (22%) indicated they retired in the pandemic, including 16% who retired early, two percent who quit their job, and four percent who were laid off or fired from their job.”
In essence, younger workers tend to be more optimistic about the prospects of working longer. In comparison, older workers actively contend with the realities of circumstances outside of their control, such as layoffs, declining health, family emergencies or other issues. As a result, workers nearing retirement may choose to modify their retirement plans and leave the workforce earlier than initially anticipated.
Simply put, retirement is a plan and not necessarily a guarantee. Either way, preparing as much as possible will always be a great help, regardless of when retirement occurs.
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