Average Retirement Age Leveling

11 Mar Average Retirement Age Leveling

Article credit and referenced, Average Retirement Age Holds Steady – Center for Retirement Research. https://crr.bc.edu/average-retirement-age-holds-steadyExplained: The fall and rise in the average retirement age since 1880 – Retirement Income Journal. https://retirementincomejournal.com/article/explained-the-fall-and-rise-in-the-average-retirement-age-since-1880

Cultural, structural changes that converged to reverse century-long decline in labor force participation may have petered out.

A report released in March by the Center for Retirement Research at Boston College studied labor force participation rates for men and women, which have been increasing steadily for several decades, to find the average retirement age. However, social and structural changes that worked together to increase participation rates may have less effect in the future.
The average retirement age for men in 2013, which the report defined as the age at which the labor force participation rate drops below 50, was around 64. For women, it was around 62.
The new report updates a 2011 report by the Center, which found that the average retirement age increased only two years to its current level over a 20-year period for both men and women.

Unexpected and substantial stream of income from old-age pensions for Civil War veterans.

A report released in March by the Center for Retirement Research at Boston College studied labor force participation rates for men and women, which have been increasing steadily for several decades, to find the average retirement age. However, social and structural changes that worked together to increase participation rates may have less effect in the future.
The average retirement age for men in 2013, which the report defined as the age at which the labor force participation rate drops below 50, was around 64. For women, it was around 62.
The new report updates a 2011 report by the Center, which found that the average retirement age increased only two years to its current level over a 20-year period for both men and women.Changes to Social Security had a significant impact. In 2000, the retirement earnings test was abolished for people ages 65 to 69. Increasing benefits for delaying retirement also made work more appealing.
According to Munnell, workers in a 401(k) plan tend to work one or two years later than those in a defined benefit plan. As 401(k)s became more common than pensions, more workers stayed in the workforce.
As jobs shifted away from the manufacturing sector and became less physically demanding, workers could stay in the labor force longer. Better health and longevity generally made it easier to keep working, too. Munnell noted that the “correlation between health and labor force activity is robust.”Additionally, employers were less likely to provide health insurance for retirees, offering a strong incentive to work at least until they qualify for Medicare.
Munnell wrote that more wives were working culturally, and many couples liked to coordinate their retirement. Because wives, on average, are three years younger than their husbands, those who retire at 62 push their husbands’ retirement age to around 65.Education also had an effect, as, according to Munnell, people with more education tend to work longer.

Finally, Munnell suggested that at least some men keep working because they like it. “Until recently, at least, their wages have been lower than those earned by their younger counterparts and lower than their past earnings,” she wrote. “This pattern suggests that money may not be the only motivator.”Munnell studied Census data from 1963, 1983, 2003, and 2013 and found that labor force participation for men between ages 50 and 65 has remained significantly below the 1963 level for each year. Workforce participation falls steeply for that age group. Munnell put the average retirement age for men at about 64.

Studying labor force participation among women over the same time periods revealed slightly different patterns. Each cohort worked longer than the one before it, Munnell found, and by 2013, more women were in the workforce than ever before. She found that the average retirement age for women was about 62.

improvements in health may have stabilized and increases in longevity may not be salient.

“The leveling off of the average retirement age suggests that earlier drivers of working longer are no longer having a substantial impact,” Munnell wrote, noting that Social Security’s delayed retirement credit is fully phased in. DC plans are nearly ubiquitous in the private sector. Furthermore, she suggested,” improvements in health may have stabilized, and increases in longevity may not be salient.”
“Yet, working longer is the key to a secure retirement,” she said. “Monthly Social Security benefits claimed at age 70 are 76 percent higher than those claimed at 62. The fact that people are always amazed when presented with this information suggests that a major educational initiative may be warranted.”