WASHINGTON, D.C. — American workers are retiring at later ages than those in the past three decades. In 1991, U.S. retirees, on average, reported that they retired at age 57. Now, the average reported retirement age is up to 61. Nonretirees’ target retirement age has also increased, from 60 in 1995 to 66 today.
Later retirement ages are coming at a time when U.S. workers are not eligible for full Social Security retirement benefits until past age 65. In 1983, Congress increased the age at which people can receive full retirement benefits. Those born between 1937 and 1959 — the youngest of whom are age 62 now — are eligible for full benefits at a prespecified age older than 65 but younger than 67, depending on the year of their birth. All of those born after 1960 are not eligible for full benefits until age 67. Retirees are eligible for reduced benefits starting at age 62.
A Gap Between Expected and Actual Retirement Ages
In addition to the upward trends in both expected and actual retirement ages, Gallup has consistently found that retirees’ reported retirement age has been about five years younger than nonretirees’ expected retirement age. This could largely reflect the reality that many current retirees were able to retire at a younger age and get full Social Security benefits than today’s workers will be able to. However, as both the expected and actual retirement ages have increased in the past two decades, and more recent retirees are subject to new age requirements for receiving full benefits, the gap between expected and actual retirement ages has persisted.
This continuing gap could indicate that workers incorrectly predict they will be able to work longer than they will end up doing, either because their employer has other plans or because an unexpected health or family situation may leave them unable to work at an older age. However, the Gallup data cannot determine whether that is the case. Gallup asks expected retirement age of a sample of nonretirees, and actual retirement age of a sample of retirees, so while the findings can show whether averages at the group level are changing, they cannot speak to whether individual workers retire at an earlier age than they had planned to.
Confounding effects of individuals’ age at the time of interview and their retirement status at that time may contribute to the persistent gap in actual versus expected retirement age among retirees and nonretirees. Many currently retired people stopped working at a relatively young age, so the sample of retirees aged 65 and under will tend to lower the average retirement age of all retirees interviewed in a given survey. Likewise, nonretired people in their mid-to-late 60s or 70s will report an older expected retirement age, pushing up the average expected retirement age of nonretirees interviewed in a given survey.
Gallup can isolate the effects of age on retirement status by looking at the proportion of all adults who are retired among different age groups, to see if those percentages are changing over time.
For the analysis, the 21 years of data from the Economy and Personal Finance survey were divided into three roughly equal time periods. This ensures adequate sample sizes for relatively narrow, five-year age ranges.
The data show there has been relatively little change in retirement status among Americans younger than 55, or 75 and older, between 2002-2007 and 2016-2022.
Among Americans nearing or past the traditional retirement age — those between the ages of 55 and 74 — significantly fewer people are retired than was the case for people in the same age group at the start of the 21st century. In each five-year age group, there has been a decrease of between five and nine percentage points in the number of retired Americans, with the biggest drops in the 55-59 age range (from 19% to 11%) and in the 60-64 age range (from 41% to 32%).
There are smaller but still meaningful declines in the number of U.S. adults aged 65 to 69 (from 76% to 70%) and those aged 70 to 74 (from 88% to 83%) who are retired.
The average age of retirement among retirees is now 61, up from 57 in 1991. And if active workers retire when they plan to, the average retirement age will increase even further in the coming decades.
Changes to Social Security payouts enacted in the 1980s are coming into play for today’s workers of retirement age, and they provide incentives for people to stay employed longer to maximize their monthly benefits after they retire. Longer life spans for U.S. adults may also be a factor in later retirement ages, with workers perhaps seeing a need to save more money, anticipating a retirement that could last 10, 20 or 30 years, particularly with the cost of living increasing. Also, a shift away from a manufacturing economy to one primarily focused on delivering services and information facilitates working to an older age.