Retiring At 65: Is It Possible?

As you approach your peak earning years, you're beginning to think about the idea of retirement. You ask yourself, “When can I retire? Will I be able to retire at 65?”

You turn to your family. You ask your colleagues. You realize the question of when you can retire doesn’t have a simple answer. It seems the average retirement age is no longer 65. But then, when will you be able to leave the workforce? That depends on what you want out of retirement.

What do you value? Your health, family, or income? Your ability to retire depends on several key factors:

• Job satisfaction. Are you motivated to come to work every day? If you are not satisfied with your job, you may be stressed and unhappy. This can negatively affect your productivity at work, putting your job in danger.
• Family needs. Does your family depend on you to support them? Are your children in college? Your family may rely on you for financial support. Your children may need your help to pay for their college tuition. You need enough money put away to support your family before you retire.
• Health. Do you feel well enough to do your job effectively? Your health can affect both the way you work and how you emotionally feel. You may consider retiring if you are experiencing health issues that make working difficult. 
• Health insurance coverage. What benefits will you receive post-retirement? You may not be able to rely on health insurance coverage or your company’s pension plan. Look into the requirements to see if you will be covered.
• Prospective retirement income. Will you be able to maintain a high standard of living after you retire? Or will you have to live on a much smaller income? If you have earned and saved enough prior to retirement, you may have more income coming in when you retire.

Imagine that you can only choose one of these factors in retirement. Which one would you choose? What do you value the most? How many of these will you realistically be able to achieve?

Growing up, you remember your parents telling you that you should be able to retire by the age of 65. Throughout your career, you have seen your colleagues taking early retirement. Will you be able to do that too? If you are thinking of retiring early or planning to retire by the age of 65, you may not like the recent research findings that the average retirement age is increasing.

The average American man in the 1990’s retired by the age of 62, and the average American woman retired by age 59. Alicia Munnell – researcher and the director of the Center for Retirement Research at Boston College – has noted that the retirement ages since then have increased. As of 2010, men and women are working until ages 64 and 62, respectively.

Researchers Rutledge, Gillis, and Webb were interested in further exploring the question, “Will the average retirement age continue to increase?” They used data from the Health and Retirement Study to conduct their analysis and then utilized these findings to estimate future retirement ages.

The researchers believe a few special reasons are contributing to this increase:

• Social security reforms. Social security is one of the main sources of income for many retirees. However, there has been a continuous decline in Social Security retirement benefits. Seniors qualify for full Social Security benefits only after attaining a certain age (typically 65) is encouraging further delays in the retirement age.
• Healthier workforce. Seniors are found to be living longer these days. They are staying in better health. They have higher levels of education and are climbing the corporate ladder faster than ever. They are not being forced out of work due to their health or job position, delaying the average retirement age.
• Decline in employment-based retiree health benefits. According to Fronstin and Adams, the amount of employers offering retiree health insurance coverage and benefits is continuing to decline. These lower rates of retiree health insurance coverage are increasing the average retirement age. Retirees are not able to depend on this coverage and need to keep working to be covered.

Regardless of health and job satisfaction, the researchers found that many seniors are not receiving enough benefits to retire at an earlier age. They must delay their retirement to stay protected. The average retirement age, in turn, is continually increasing.

You cannot control the changing Social Security policies and the decline in retiree health benefits. However, you can prepare for retirement by re-prioritizing your values and starting to prepare now.

You can start by saving more money, investing wisely, being aware of Social Security trends, and delaying the use of Social Security. These recommendations will provide you a better sense of security.

Until you feel fully satisfied with your savings, the availability of benefits, and overall achievements, the best option for you is to keep yourself healthy and motivated in the workplace.

Remaining healthy and motivated to work will increase your productivity and in turn, outlook on life. The longer you stay in the workforce, the better standard of living you will have post-retirement.

• How can you stay healthy?
  • Exercise
  • Eat proper meals
  • Stay hydrated
  • Get a good amount of sleep
  • Avoid caffeine
• How can you stay motivated?
  • Seek active feedback from your supervisors
  • Create positive working relationships
  • Challenge yourself
  • Think positive
  • Reward yourself
  • Work with a professional coach to reinvent your career

The average retirement is increasing, but that doesn’t mean you won’t be able to retire. You now know why seniors are finding it harder than ever to retire. But with above considerations in mind, you can make a plan to retire. From investing wisely to remaining aware of Social Security trends to aging in place with a medical alert system, it is never too late to act and to prepare for retirement. 

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