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When Do People Retire on Average

Rachel Cautero
·5 min read
Elderly Asian couple enjoying being outdoors
Elderly Asian couple enjoying being outdoors

Determining when to retire can be tough. There are various factors to consider, including your financial situation, your health, and the lifestyle you wish to enjoy once you retire. While the decision of when to retire is personal to you, it may help to know when people typically retire. So, what’s the average retirement age, and how is it changing? And what financial considerations should you weigh before you retire?

Average Retirement Age (and  How It’s Changing)

Workers in the United States generally retire at around age 64, though data shows that the average age varies by state. For example, the average age of retirement in Washington, D.C., is around 67, while many states’ average age is around 65, such as Iowa, Kansas, Maryland, Vermont, and Texas. Other states boast even lower ages, like Alabama, Kentucky, and Michigan’s 63, or Alaska and West Virginia at age 61.

In recent years, the average retirement age has risen. In 1986, the average retirement age for men was about 62 and for women about 57. By 2016 the average retirement age for men had climbed to approximately 65 and for women approximately 63.

Changes in Social Security, fewer employer pensions, even extended lifespans can cause many to put retirement off, at least for a few years.

Additionally, with the average Social Security benefit at just $1,503 a month and pensions on the decline, hopeful retirees may find that their retirement budget and expected spending far outweighs their expected income. That can also cause them to put off retirement.

Social Security and Your Retirement Age

A large ocean liner floating in a calm sea.
A large ocean liner floating in a calm sea.

Once you reach your 60s, Social Security become a factor in deciding when to retire. You can start collecting Social Security benefits at age 62, though you aren’t yet considered full retirement age (FRA) at that time and will only collect 75% of your expected benefits. By comparison, if you wait until age 65 to begin collecting benefits, you’ll receive 93.3% of your monthly benefit. The FRA is 66 for people born between 1943 and 1959 or 67 for those born in 1960 or later.

But your FRA is not the year when you get the largest possible benefit. Retirees can also get more than their FRA benefit if they wait beyond that age to begin drawing benefits. For example, waiting one year past your FRA results in a getting between 108% and 115.3% of your FRA, depending on which month you were born in. And if you wait until you turn 70 to start getting Social Security, you will receive 132% of your FRA benefit.

What to Do Before Retirement

But before you can actually enjoy your hard-earned retirement, there are a few important things you’ll need to check off your list. First, if you haven’t already been contributing the maximum to your retirement savings plan, now’s the time to start doing so.

Remember, beginning at age 50, you’re eligible to contribute up to $6,500 in catch-up contributions to your 401(k), 403(b), or 457(b). If you have a traditional or Roth IRA and are age 50 or older, you can contribute up to $1,000 in catch-up contributions.

Once you hit 65, you are eligible to begin receiving Medicare, a federal government program that provides healthcare to the elderly. To be eligible for Medicare, you need to be a U.S. citizen or permanent legal resident or have worked long enough to be eligible for Social Security. This is an important factor in the retirement puzzle. That’s because healthcare costs are one of the biggest expenses you can expect to pay during retirement. Some studies estimate that a retired couple should expect to spend $285,000 in healthcare and related medical expenses during their golden years.

And don’t forget about Social Security. Use the Social Security Administration’s benefits calculator to determine your estimated benefit. What that number looks like and how it plays into your retirement budget may also affect your timeline.

The Bottom Line

A retired man strolls down a golf course fairway.
A retired man strolls down a golf course fairway.

While the average retirement age for workers in the United States is 64, that number varies as a result of many factors, including your Social Security benefit, your retirement savings, any pensions you might have, even the lifestyle you want to live in retirement. You can begin collecting Social Security benefits at age 62, but keep in mind that at this age, you’ll collect only a portion of your benefit. However, if you wait until age 65, you’ll receive 93.3% of your monthly benefit.

Tips on Retiring

  • Consider talking to a financial advisor about when to retire. Finding the right financial advisor who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors who will help you achieve your financial goals, get started now.

  • Deciding when to retire means sorting through several key considerations: the balance of your retirement savings, your Social Security benefit and Medicare, which you’re eligible for when you turn 65, can all impact when you decide to retire. Here’s a calculator that can help you make the right decision.

Photo credit: ©iStock.com/arekmalang, ©iStock.com/Skogas, ©iStock.com/artelectico

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