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New reports from prominent economists show that the average retirement age for American workers is steadily creeping up.
And that trend brings the question: When will the retirement age rise in America?
Over the past 30 years, the average retirement age has increased by about three years, economist Alicia Mannell reported in an April study summary. The typical retirement age for 2024 was 64 for men and 62 for women.
The upward trend is slow, but it’s impressive. In 1994, the average man worked at age 61, while the typical woman recorded at 59.
Americans live long and live long
We’ve been working longer for several reasons:
- Americans live longer, stay healthier, and work in physically less demanding jobs.
- Workplace pensions have replaced the 401(k) plan that rewards workers who delay retirement.
- Due to the social security changes, the age of “full retirement” has gone from 65 to 67, punishing those who previously claimed profits.
- Few employers provide health insurance to workers who retire before the age of 65, the year Medicare benefits begin.
“There were a lot of forces that encouraged people to work longer,” said Munnell, a senior advisor to the Center for Retirement Research at Boston University, the organization she founded.
Are Americans working for a long time because they have to?
Are the trends that pre-retirement before you retire better or sick in American society? There is a division of opinion among retirement researchers.
If Americans worked long to stop poverty, rising retirement age would be a bad thing, said Andrew Biggs, a senior fellow at the American Enterprise Institute. But he hasn’t seen it happen. That’s not the case at least for most Americans.
“They get higher Social Security benefits and the benefits they get from their private retirement plans are on the rise,” he said. “So they don’t have to work to get away from poverty.”
But whether American retirees have enough savings and profits to retire and live comfortably is a matter of lively debate.
With the 2024 virus, Biggs claimed that most retirees manage well, even with relatively modest savings.
Meanwhile, a 2024 AARP survey found that one-fifth of more than 50 adults had no retirement savings.
“So, for a meaningful share of workers, postponed retirement is likely a necessity to maintain a major income stream,” said Nicola Bianchi, assistant professor of strategy at Northwestern School of Kellogg’s School of Management.
Workers have a love-hate relationship with retirement
American workers have clearly mixed feelings about retirement.
Millions of Americans dream of retiring early. As we age, our dreams give way to reality, and many workers decide to continue to be employed as much as possible. According to the Transamerica Center for Retirement Studies, an average of over 50 workers is expected to retire at age 67.
“We’re looking forward to seeing you in the process of delivering a great deal of energy,” said Catherine Collinson, CEO of Transamerica Center.
But in the end, many of us leave earlier than we had planned due to downsizing or declining health in our companies.
Munnell’s research attempted to divine whether the average retirement age would increase further in the coming years. Will most Americans work until they are 70 one day?
Probably not. Munnell concluded that the upward trend is likely to have peaked.
“There’s all these units that pushed the average retirement age starting in the mid-’90s,” she said. “And what hit me was that they all seemed to play themselves.”
A gradual increase in the full retirement age for Social Security has been made, and no further changes are planned. The transition from pension to 401(k) is complete, with half of American workers currently taking part in the plan. Meanwhile, the trend towards a longer, healthier lifestyle has slowed down.
Two ages are approaching the decision to retire
In the calculus of retirement in America, two particular ages grow. One is 62 years old, and most Americans are eligible for Social Security. The other is 65 years old, the year Medicare begins.
Craig Copeland, director of Employee Benefits Research, or EBRI’s Director of Wellness Benefit Research, isn’t surprising that the average retirement age for men and women falls within the period.
“I think the last two years will be important,” he said. “Unless they’re moving, we don’t know that the average retirement age will move significantly.”
The share of 62-year-old Americans claiming social security has declined dramatically in recent decades. Based on the expected lifespan, most of us are financially better if we wait until 70 to claim profits up to 70.
Still, 62 remain the most popular age for Americans to assert social security.
Will my retirement age decrease in 2025?
Munnell predicts that the average retirement age may actually decrease in 2025.
The Trump administration’s cost-cutting campaign across the federal government has sparked a new torrent of social security claims this year. Compared to the same month in 2024, new bills increased by more than 15% in March.
Munnell and others have been attributed to a surge in widespread fears about the stability of the retirement trust fund amid staff cuts, regulations change, website suspensions and leadership shuffling.
“They’re all competing to claim profits, meaning they’re more likely to quit their job sooner than planned,” she said.
Future policy changes will help determine whether the retirement age in America continues to rise.
Congressional Republicans have regularly proposed raising the full retirement age for Social Security, although they have pledged to President Trump not to mention it.
If the age of eligibility for full Social Security benefits rises from 67 to, say, 70, the average retirement age in the US would likely resume upward drift, Munnell said.
If Congress raises the age of Medicare eligibility, retirement age could rise even more dramatically. However, retirement experts say it’s difficult to imagine the scenario given the high costs of health insurance.
“I don’t think that’s going on,” said Copeland of Every.
