Why retiring at 65 could become a thing of the past

Personal finance

Activists participate in a rally urging the expansion of Social Security benefits in front of the White House July 13, 2015.

Getty Images

Raising the retirement age is an emotional issue.

For evidence, just look at proposals to move up the full retirement age for Social Security. Even the idea upsets advocates who want to see the program expanded and individuals receiving benefits. Because of that, lawmakers tend to tiptoe around the issue.

Outside the U.S., French citizens have taken to the streets to protest President Emmanuel Macron’s plan to overhaul the country’s pension system. Among the proposed changes is raising the retirement age to 64 from 62 .

Most workers do not want to be told they have to work longer.

Yet it turns out that in the U.S., many already anticipate extending their working years, according to recent research from the Transamerica Center for Retirement Studies.

A majority of workers — 54% — said they expect to stop working sometime after age 65 or never retire at all, the research found.

Meanwhile, just 24% said they plan to retire at 65, and 22% said they plan to retire earlier.

“People want to extend their working lives and plan to keep working in retirement,” said Catherine Collinson, CEO and president of the Transamerica Center for Retirement Studies. “By and large, many simply have not yet saved enough to retire comfortably.”

More than half of workers — 55% — said they plan to work either part-time or full time in retirement. While most of those respondents cited financial reasons for those plans, many also pointed to other reasons, many related to healthy aging, such as avoiding social isolation.

U.S. workers may also be driven to work longer for another reason: concerns about the future of Social Security, Collinson said. Three in 4 workers said they are worried that Social Security will not be there for them when they retire.

Separate research Transamerica conducted in collaboration with the Aegon Center for Longevity and Retirement looked at what age workers around the world expect to retire from all paid employment.

While the median (the middle in a list of numbers) age in the U.S. was 66, other countries varied. The Netherlands came in with the highest age, 67. China and Turkey came in with the lowest at 58.

The median was 65.

Still, the retirement age is creeping higher in the U.S. and elsewhere, Collinson said.

In the U.S., according to the Social Security Administration, full retirement age for individuals born in 1960 and later is 67.

Other countries are also moving in that direction, Collinson said. The Netherlands is already at 67, while France, Spain and Poland all have plans to move towards that age.

“That tends to be the prevailing benchmark,” Collinson said.

More from Personal Finance:
Not knowing these Roth IRA truths can cost you
Congress approves major changes to how you save for retirement
This is why filing your income tax return will never be the same

Articles You May Like

‘Wicked’ tallies $19 million in previews, as ‘Gladiator II’ team-up heads for $200 million opening weekend
Target shares plunge 20% after discounter cuts forecast, posts biggest earnings miss in two years
U.S. ‘industrial renaissance’ is fueling a rebound in fundraising, Apollo CEO Marc Rowan says
TJ Maxx parent says holiday shopping is off to a ‘strong start,’ but its guidance tells another story
The must-have gift of the season may be a ‘dupe’

Leave a Reply

Your email address will not be published. Required fields are marked *