Stop working at 55? Fat chance
First, the good news: After creeping up incrementally since the 1980s, the average retirement age seems to have leveled off — at least, for men. The bad news: It’s probably later than you want to hear, and women’s average retirement age will probably continue to rise.
New research from the Center for Retirement Research at Boston College says that, as of 2013, the average retirement age for men was 64, and roughly 62 for women.
Alicia Munnell, director of the Center for Retirement Research and author of the new study, says financial incentives to delay drawing Social Security, the shift from pensions to 401(k)s and the unavailability of Medicare until the age of 65 all are part of the reason behind the increase.
The recession and its aftermath yielded two more counterbalancing trends: Many older Americans delayed retirement after their 401(k)s shrunk, but others who were laid off had a hard time reentering the workforce.
This isn’t the situation any longer, Munnell says. “By 2015, the cyclical effects have worn off,” she says. “The impact of the various factors that contributed towards working longer… largely have played themselves out,” she says.
At least, this is the case for men. “Male labor force participation has leveled off and, consequently, so has the average retirement age,” Munnell says.
Things are a little different for working women, whose historical retirement trends vary from men’s because women didn’t start entering the workforce in large numbers until the second half of the 20th century.
“Women’s [labor force] participation seems to have increased,” Munnell says. “This upward shift in the curves is reflected in the recent upward trend in the average retirement age.”
And this trajectory towards a later retirement is likely to continue, at least for a while, she says. “I think that it will continue to increase until it becomes very close to the average for men.”
But aside from the chance to earn a bigger Social Security benefit and shore up your nest egg, Munnell says there are advantages to the economy if more people keep working longer, calling this an “unambiguously positive” trend.
“The more people who are working, the bigger the GDP pie and the more output available for both workers and retirees,” she says.