When to Retire: Social Security, Full Retirement Benefits, and the Average Retirement Age in America

Ben Allen  | 

Planning for retirement is something every worker, regardless of age, needs to do. You don’t just stumble into retirement; it requires planning, saving, and a working understanding of the economy. In order to do all of these things, you need to learn the history of retirement, the ever changing benefits and trends of retirement, and how this can all impact when you will be able to retire.

Retirement Age: Trends and the History of When and Why Americans Retire

Currently, the average retirement age is between 63 to 65 years old. Those that retire at 63 or younger are considered to be retiring “early,” as most government benefits like social security or medicare don’t kick in till age 65. Many rely on these benefits in order to have enough money to live without working, making them go hand in hand with when people can retire. This age, though, is expected to increase for future generations, with some predictions going as high as 70 to 75 years old before retirement.

History of Retirement

In 1881, Otto von Bismarck, the conservative minister president of Prussia, introduced the first concept of retirement for older citizens. The plan included creating a government funded support system for older members of the society, an idea never considered before. In that day, people didn’t stop working, they worked until they died. If they reached an age where they could no longer work, their family was expected to care for them until they passed away. Eventually, the German government applied this idea to care for citizens over the age of 70, an age most citizens at that time did not reach.

Other institutions had similar plans for when their citizens reached old age. The US military had given pensions and benefits to soldiers who had risked their lives, and many US municipal employees, like police, firefighters and teachers, received pensions starting in the mid 1800s. These pension plans typically allowed employees to retire at 65, an age tied closely to life expectancy.

Social Security Retirement Age

When social security was introduced to the US in 1935, this age of 65 was utilized both to match pensions and because not many people lived past that age. The life expectancy at the time was 58, yet once the Great Depression ended, that age rose thanks to advances in modern medicine. By 1960, the average life expectancy went up to 70, meaning now instead of a handful of people using social security, the average became everybody using it for at least five years.

Over the years though, the average life expectancy has risen to around 78 to 80 years depending on a few different factors. People are now using social security for over a decade, putting a strain on the government’s funding of the program. This in turn means less money for retirees, requiring them to work for longer.

Early Retirement Age

Since its creation, Social Security has had a big influence on when people choose to retire. Retiring before 65 is considered an early retirement because you won’t have access to government funded programs for retirees. If somebody plans on retiring before that age, they need to consider that they won’t have social security until they reach 65 and arrange to have more money at their disposal from personal accounts.

When to Retire: Setting Your Own Retirement Goals and Creating a Plan to Achieve Them

In order to retire, you need to take a hard look at your current situation and make a plan. Don’t have a plan on how to retire? Start right now. The biggest step is figuring out when you want to retire and when you can retire. For many, retiring at 65 is not going to be possible because social security will simply not be enough to cover their needs when they reach that age. That means they’ll need extra money in personal retirement accounts to help finance their golden years.

When Can I Retire?

When you can retire depends on things like: your age, occupation, and current savings. If you are wanting to figure out how soon you can retire, you’ll need to figure out how much money you’ll need, what kind of retired life you want, and how much social security will provide for you at 65. The average per month income from social security is $1,180, meaning any other costs come out of your savings or other sources of income.

By using that data, and your expected life span based on your birth year, plan out how much money you’ll need. That includes costs like healthcare, mortgages, regular expenses, and any luxuries you want. Then, you can make a plan on how to save enough money to retire at a reasonable age, whether that is at 65 or later.

When Should I Retire?

There is more to making the choice of retirement than simply being financially able to. Other considerations that go into when you should retire can include: personal health, career goals, physical requirements of your job, what it will take to stay competitive, and more. Make sure that when you retire is a strategic choice that best benefits you, not something that automatically happens when you turn 65. Leave the workforce on your terms, happy with what you accomplished

Another part of retirement you should plan for is what you are going to do when you retire. Having nothing to do all day can lead to severe depression, so have plans on how to stay active in your later years. If there isn’t a huge need to retire and you don’t have plans for what to fill your retirement with, maybe consider continuing to work and saving more money.

Making a plan for retirement can be complicated work, but it’s necessary if you want to be able to retire at the right age for you. Plan ahead, figure out how much social security you are likely to receive and how much personal savings you’ll need, and consider when you personally want to retire. Then follow your plan and make it happen!


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Ben Allen is a freelance content creator and digital marketer who believes in helping small businesses succeed. He spends his free time bragging about his two daughters, eating stuffed crust pizza, and playing video games.

This post was updated March 27, 2018. It was originally published March 29, 2018.