Retirement Age Rises Sharply to 61 Years Old

According to new information from Gallup about the retirement age in the U.S.:

The average age at which current U.S. retirees say they actually retired is now 61, up from 59 a decade ago and 57 in the early 1990s. Conversely, 37% of nonretirees expect to retire after age 65, up from 14% in 1995.

The data may not appear to break any ground, but the long-term consequences will. People are retiring closer to the date at which they can get Social Security, which means their incomes and savings to bridge the few years from their early 60s to their mid-60s when federal government aid kicks in has nearly disappeared.

A great deal of research shows that many older Americans do not believe they have anywhere near the savings required to maintain their lifestyles as they leave the workforce. These people are forced to work or they will fall to annual income levels well below those that they have had for much of their adult lives. The entire problem could be exacerbated if the federal government decides to raise the age at which Social Security is available, or to simply cut these payments in an attempt to erase the federal deficit and slow the rate at which overall U.S. debt almost certainly will grow. Congressional Budget Office data shows an expectation that deficits will widen toward the second half of this decade as the pool of older Americans rises.

An unintended consequence of low savings among older Americans leading to a rising retirement age is the extent to which it robs people under 24 of job opportunities. In many parts of the country, the unemployment rate among the young is twice that of the overall population. The percentage gets even worse for those without college educations. Lack of training and experience among these younger Americans often makes the alternatives of hiring well-educated people in their 60s or 70s more attractive to many employers.

The destruction of wealth among older people in the United States likely will trickle down to life-long wealth creation opportunities for the young as their search for work is extended by months, or perhaps years.

Methodology: Results for this Gallup poll are based on telephone interviews conducted April 4 to 14, 2013, with a random sample of 2,017 adults, aged 18 and older, living in all 50 states and the District of Columbia.