From congressional hearings, to research studies, to countless media reports, one would think the American worker would be getting the message that most need to stay longer in the workforce before retiring. But that isn’t at all the case, a new study confirms.
Indeed, the average retirement age for men today is 64, and for women, 62. Neither average is making it anywhere close to the new recommended retirement age of 70, let alone the earlier Social Security targets of 65 or 67.
“Today’s average retirement ages are just about where they were a decade ago, suggesting that some of the factors spurring the turnaround since the 1980s may have exhausted themselves,” said Alicia H. Munnell, of the Center for Retirement Research (CRR) at Boston College.
This month the CRR updated its average retirement age projections, looking at data going back to 1962. In its report, “The Average Retirement Age – An Update,” the CRR found that the average retirement age for men has remained fairly stable during that entire time – ranging from 62 percent to 65.5 percent for the four decades.
There is some good news with the statistics for women, which have increased dramatically during that time overall, from 52.5 percent in 1962 to the current 62 percent. Still, the numbers for women have leveled off the past decade, when they had increased to 60 percent.
Munnell said she was very surprised by the center’s most recent findings. Like most people, she said, the expectation was that retirement ages would be on the rise.
“For people to be secure in retirement they really have to work longer,” Munnell said. “There have been a lot of factors that encouraged people to increase their workforce activity and I thought those things would have been just chugging along, pushing everything up continuously. But they don’t seem to have.”
The CRR study examined a number of factors that could impact retirement age, including anticipated healthcare considerations, labor force participation, and the benefit of employer pension plans.
“This was really an opportunity to update the numbers, to see what is happening, and to see if the average retirement age was continuing to rise, or whether some of the factors that had led to the rise were petering out,” Munnell said of the new study. “Basically, our sense, my sense, was that there were a lot of things turning the patterns around in the late 80s, early 90s, and that a lot of those forces may have run their course and things seemed to be leveling out.”
That may be why so many Americans are said to be ill-prepared for retirement, with too little savings, and too few options on how to increase retirement income. In response, Munnell said. “the next big push” is needed.
Needed: Another big push
So what caused the first big push when it comes to average retirement ages?
“I conclude that most of the mechanical things—the shift from defined benefits to defined contribution plans, high healthcare costs, the desire to wait to age 65 to have Medicare, improved health and longevity, and education—those have sort of worked their magic,” Munnell said. But the impact of those factors has run their course, she believes.