What age is on-time retirement?

[alm0stk00l]

I have spent so much time on these forums and following communities like these that it never occurred to me that I don't actually know what age is "on-time" retirement. If someone had asked me yesterday I guess I would have answered 59.5 because that is when you can withdraw from retirement accounts without penalty. The article shared below seems to insinuate that even retiring at 65 is considered early retirement.

So what age is considered "on-time" retirement in America at large?

https://www.cnbc.com/2022/02/01/why-early-retirement-is-one-of-the-worst-money-mistakes-youll-regret-says-harvard-economist.html

[Sugaree]

I work for the federal government, so minimum retirement age is 55-57 depending on when you were born (though everyone who could retire at 55 is already older than that anyway).  Many of my co-workers talk about working until 62 or 65.  So I'd say that would be the "on-time" retirement here.

[Arbitrage]

I'd say 65, the age of Medicare eligibility.

[youngwildandfree]

Healthcare coverage is the primary concern I hear people voice when I talk about FIRE, so I would agree that 65 is the age most people are focused on in the US.

[NorthernIkigai]

In my country, 65 has traditionally been seen as the normal time of retirement, although a lot of people retire a couple of years earlier using different programs or due to illness. If you have built a very successful business you might sell it and retire at around 55, but this is not really something normal employees do. Hardly anyone retires earlier than that.

The standard age has gradually been raised from 65 because of the way the (not particularly pyramid-shaped) population pyramid looks and because people live longer. The younger you are, the older you’ll be when your normal pension age comes. Mine is 68 years and 11 months. Yeah, right, is all I can say to that!

[Ron Scott]

It’s whatever You want it to be, because the decision is an individual one. Insurers and most governments have their own strategies that may not jibe with yours.

People who don’t like working like to retire as soon as they have enough money to support themselves and their estate, if any. Or they just retire according to calculations they perform on the internet and cross their fingers.

People who like working work much longer.

Averages are meaningless.

[BlueHouse]

Many people on auto-pilot use Social Security's "Full Retirement Age" as on-time retirement age. 
That means (for people my age) 67 is FRA.  62 is early, and 70 is delayed. 

But using this definition, 70 is when you get the most you can money you can, so why wouldn't that be FRA? 

[shuffler]

So what age is considered "on-time" retirement in America at large?

2018 Gallup Poll Data says the average retirement age (among people who had actually retired by 2018) was 61.
The same poll data reports that among people not currently retired, their personal opinion of their expected age of retirement was 65-67.

So your sense of "on time" could mean either of those things.  When do people actually retire vs. when do they expect to retire.

[marty998]

So what age is considered "on-time" retirement in America at large?

2018 Gallup Poll Data says the average retirement age (among people who had actually retired by 2018) was 61.
The same poll data reports that among people not currently retired, their personal opinion of their expected age of retirement was 65-67.

So your sense of "on time" could mean either of those things.  When do people actually retire vs. when do they expect to retire.

61 being an average. You hear so many stories of people having to work until they are 71, that therefore there must be an equivalent number of people stopping work (forced or otherwise) at 51. And those "young" ones do not generally have the savings to tide them over.

[clifp]

Retirement seems impossible to lots of folks in their 30 and 40, but eventually, many people run out of things they have/want to buy. The kids leave the house, the mortgage that seemed impossible now doesn't seem so high. They realize they haven't saved for retirement and start doing so. When they hit 60 it doesn't seem so impossible anymore.

But all accounts, one of the primary groups not going back to work during the great resignation is folks in the 50s and 60s, retiring early.  So I suspect that between the pandemic and booming stock market we will actually see the average retirement age decrease over the next couple of years.

My answer for normal is anytime in your 60s. 50s is early, 70s is late.

[Much Fishing to Do]

I generally think of anything before 62 in the US as early retirement, mainly because I don't think most people consider retiring (and probably shouldn't given median retirement balances which look more like emergency funds to me) before they have a monthly pension coming in of some amount, and for most people that is just SS.  So I guess I'd accept "on-time" as anywhere from 62 to 65 (with medicare) to 67 ("full" SS for anyone born after 1960). 

It of course is different for anyone with a real (and solid) pension, which is why I generally think of fed workers, teachers, military etc as having the real benefit of an "on-time" retirement being mid to late 50s

[Turtle]

I have spent so much time on these forums and following communities like these that it never occurred to me that I don't actually know what age is "on-time" retirement. If someone had asked me yesterday I guess I would have answered 59.5 because that is when you can withdraw from retirement accounts without penalty. The article shared below seems to insinuate that even retiring at 65 is considered early retirement.

So what age is considered "on-time" retirement in America at large?

https://www.cnbc.com/2022/02/01/why-early-retirement-is-one-of-the-worst-money-mistakes-youll-regret-says-harvard-economist.html

The "Jane" example in that article has $150K inheritance from her uncle in one sentence that somehow migrates to being $150K in 401k only a few lines down.  For being at Harvard, this author certainly is lax about details. 

As far as the "on-time" question is concerned, it has traditionally been 65 in the USA, which is still the age for Medicare and used to be the age for Social Security.

[LaineyAZ]

I agree with clifp and Much Fishing To Do about the average or expected retirement ages.

I also think that the Affordable Care Act has allowed more workers to retire in the 55 to 65 age range (pre-Medicare eligibility); prior to the ACA the insurance premiums and "pre-existing conditions" were the main reason many had to continue to be employed.  And I agree that the Great Resignation has seen many more Baby Boomers quit working a little earlier than they'd expected. 

Add me to those who are curious to see how this will affect the average numbers in the next few years as we move from pandemic to endemic.

[Much Fishing to Do]

I also think that the Affordable Care Act has allowed more workers to retire in the 55 to 65 age range (pre-Medicare eligibility); prior to the ACA the insurance premiums and "pre-existing conditions" were the main reason many had to continue to be employed.  And I agree that the Great Resignation has seen many more Baby Boomers quit working a little earlier than they'd expected. 

Add me to those who are curious to see how this will affect the average numbers in the next few years as we move from pandemic to endemic.

That's a good point.  I've always had my own private health insurance self-employed, and even as an employee what was offered was so crappy and expensive I kept the private with no subsidies (It took me so long to find one that would dependably cover stuff I didn't want to switch).  I was pretty surprised when I found out after FIRE I'll end up paying $1k+ less per month for my premium and actually have better coverage than now.

[wageslave23]

I hope anyone in their 50s or 60s who is deciding to retire early because of the great stock market gains the last 10+yrs is taking the current market valuations with a grain of salt.  If you are in your 30's or 40's, no big deal when the market drops 30% from the current high valuations, you can just go back to work.  There aren't as many decent jobs for 50 and 60 yr olds trying to re-enter the workforce.

[zolotiyeruki]

And I agree that the Great Resignation has seen many more Baby Boomers quit working a little earlier than they'd expected. 

Add me to those who are curious to see how this will affect the average numbers in the next few years as we move from pandemic to endemic.

Last time I checked the numbers, there were about 4.5 million fewer people in the workforce than earlier trends would have predicted.  I saw a stat that about 25% of those were people who retired early.  If we assume 2% of the workforce retires each year, and 160 million people in the workforce, we can estimate that over the past two years, 6.4 million people would have retired, but instead we have about 7.5.  That's only about 4 months' worth of retirees, and those are folks who would have retired in a few years anyway, so I'd expect that particular effect to wear off fairly quickly.

It's the other 3.4 million people who left the workforce that will be interesting to watch.  For example, I've heard of a lot of teachers leaving, many in the start or middle of their careers, and that's an impact that will take a long time to wear off.  Also, a whole ton of late-middle-age to seniors who were working part-time jobs aren't there any more.

[EscapeVelocity2020]

Good thread, but the more interesting thing to me is just how different people are at 65.  You can have folks like Buffett and Mark Sisson that look like they are ready for their first day at work at 65 and beyond, or you could have a median American that looks like a wheel is about to fall off as they hobble in to their 50's.  I like being on this forum for the excitement folks feel around the idea of 'retirement', but it's great to have carrots to chase that help you enjoy every day.  There is no 'gold medal' for retiring before whatever is considered normal, other than the one you give yourself.  I guess there used to be a blogging income associated with FIRE's popularity too.

[By the River]

The "Jane" example in that article has $150K inheritance from her uncle in one sentence that somehow migrates to being $150K in 401k only a few lines down.  For being at Harvard, this author certainly is lax about details. 

As far as the "on-time" question is concerned, it has traditionally been 65 in the USA, which is still the age for Medicare and used to be the age for Social Security.

I agree that 65 is the "traditional" age.   I had the same problem with the article but re-read it so I think she has the $150K inheritance in a savings account and another $150K in a 401k.  So  $300K combined to retire on.   It does say later that "Jane is saving nothing"  even though he earlier said that she was saving 3% in her 401K.  (Although to us, 3% is basically saving nothing).   

[Retire-Canada]

There aren't as many decent jobs for 50 and 60 yr olds trying to re-enter the workforce.

I'm not sure that it would be hard to get a decent job today given the labour market, but let's just say that's true...why do you need a "decent" job? If you are frugal and your portfolio drops 30% you can replace 30% of your annual budget with a pretty basic PT job. I would also hope any competent MMMer would have planned for SORR risk and not even need to get a job to deal with a market crash early in FIRE.

For the OP's question I'd call 65 "on time" for retirement.

[zolotiyeruki]

There aren't as many decent jobs for 50 and 60 yr olds trying to re-enter the workforce.

I'm not sure that it would be hard to get a decent job today given the labour market, but let's just say that's true...why do you need a "decent" job? If you are frugal and your portfolio drops 30% you can replace 30% of your annual budget with a pretty basic PT job. I would also hope any competent MMMer would have planned for SORR risk and not even need to get a job to deal with a market crash early in FIRE.

For the OP's question I'd call 65 "on time" for retirement.

Also, you don't even need to replace 30% of your annual budget.  The 4% rule accommodates a substantial degree of SORR.  If you play around with the "Rich, Broke, or Dead" simulator, a 30-year retirement starting at age 50 has a 93% success rate if you have zero spending flexibility, don't try to bring in any income, and don't count social security.  A mere 15% spending flexibility (alternatively, working to earn 15% of your living expenses) gets you to 100%.  Alternatively, in this scenario, if you have zero spending flexibility, and take SS at age 65, and it only covers 25% of your spending, you're still at a 98% success rate.  That 2% failure rate assumes you hit SOR problems right away, don't make any spending or income adjustments, wait 15 years to take SS, and only receive 25% of your living expenses via SS.  Removing any of those five assumptions gets you back to 100%.

[wageslave23]

There aren't as many decent jobs for 50 and 60 yr olds trying to re-enter the workforce.

I'm not sure that it would be hard to get a decent job today given the labour market, but let's just say that's true...why do you need a "decent" job? If you are frugal and your portfolio drops 30% you can replace 30% of your annual budget with a pretty basic PT job. I would also hope any competent MMMer would have planned for SORR risk and not even need to get a job to deal with a market crash early in FIRE.

For the OP's question I'd call 65 "on time" for retirement.

I was referring more to regular people who planned on working until 65, but saw their investments double over the last 4 years and decided to retire sooner.  Not understanding CAPE, SORR, taxes, etc.  Those same people may be used to living on 60 or 70k a year, so working at Walmart pt might not cut it.  Also, some people in that age bracket had worked their way into cush management roles where they were getting paid 6 figures and have done any real work in more than a decade. They might not even be able to handle a retail job.  I'm thinking of my dad in particular.  His skill set is very specific, and he's set in his ways and not very adaptable. I would recommend someone like him not pay attention to the last two years of stock gains.  Easy come, easy go.

[RWD]

I was poking around the various pages of my employer's payroll system today and noticed that it said my early retirement date is when I turn 60 and normal retirement is at 65.

[flyingaway]

I think when you believe that you have enough money to retire, then that is the time to retire. If you do retire at that time, then you are on time. Finance is a more important factor than age.

There are problems associated with retiring too early or too late, so retiring on time is to be appreciated if you can.

[moof]

Many folks find themselves unemployable due to age discrimination and outdated skillsets.  Those folks are often retired early by circumstance rather than by choice.
A lot of folks take SS at 62 because they have to, not by choice.  They’ve been unemployed burning away meager saving since their mid-50’s, relying on their kids and friends.  Sad stuff.
A lot of my motivation to save is to outrun the day when I stop getting responses to resumes.

[DrinkCoffeeStackMoney]

I think of "normal" retirement age in the US as 65+, mostly because people don't financially prepare to retire early.

I'm 48, on track to be work optional by 54, but will probably work until at least 59.5. I'd most likely be willing to work even longer if I could take a step back, or work part time, or do consulting. I actually don't mind to work at all, I just don't want to work at my current level for another 16-20 years.

[pasadenafr]

For me it's FRA. In both my home country and the US, my FRA is 67 years old. It was 60 for my parents (but my dad still had to work until 65 to get full credits because he hadn't contributed to the national retirement plan for 10 years). I think for my sister, had she stayed back home, it would have been 65, and 67 for me.

To which I say, yeah, right 🙄

[Cranky]

There aren't as many decent jobs for 50 and 60 yr olds trying to re-enter the workforce.

I'm not sure that it would be hard to get a decent job today given the labour market, but let's just say that's true...why do you need a "decent" job? If you are frugal and your portfolio drops 30% you can replace 30% of your annual budget with a pretty basic PT job. I would also hope any competent MMMer would have planned for SORR risk and not even need to get a job to deal with a market crash early in FIRE.

For the OP's question I'd call 65 "on time" for retirement.

I was referring more to regular people who planned on working until 65, but saw their investments double over the last 4 years and decided to retire sooner.  Not understanding CAPE, SORR, taxes, etc.  Those same people may be used to living on 60 or 70k a year, so working at Walmart pt might not cut it.  Also, some people in that age bracket had worked their way into cush management roles where they were getting paid 6 figures and have done any real work in more than a decade. They might not even be able to handle a retail job.  I'm thinking of my dad in particular.  His skill set is very specific, and he's set in his ways and not very adaptable. I would recommend someone like him not pay attention to the last two years of stock gains.  Easy come, easy go.

“Regular” people probably don’t have investment accounts.

I belong to a couple of more traditional retirement discussion groups, and there are tons of people who plan to retire the minute they turn 62 and can claim social security while having very little other savings.

[Chris Pascale]

To me, it's when you pay everything off, have fulfilled your obligations (kids, etc.), and then have enough rolling in to pay for the lifestyle you are willing to live within.

I'm about 40 and while some pieces I wrote discuss leaving the federal government around 2030 to lock in the pension I can collect in the year 2042 at age 60, my youngest daughter is 10. If it's looking like she (or the other 3) are heading to something like med school, I'm going to hang in the workforce a bit longer. After all, I'll have the time and will be making $150,000+. If I get an offer to teach full-time, then I'll "retire" into teaching, which I anticipate doing until about age 60 when I can begin collecting both my federal and state pensions.

[Fishindude]

65 Has traditionally been the standard retirement age in U.S.
Anything prior to that is early retirement.

[L8_apex]

To me, it's when you pay everything off, have fulfilled your obligations (kids, etc.), and then have enough rolling in to pay for the lifestyle you are willing to live within.

And I took on $1.6 million in mortgage debt (buying rental homes) then called it quits. 

[Loren Ver]

A little older, and some year duplication, but this is roughly when people retire in bubble format.

Loren

[American GenX]

For me it's FRA. In both my home country and the US, my FRA is 67 years old.

^^ This is the correct answer for the U.S.  It's 67 years old for me and most people I know.  It's a little less if you're old enough.

[American GenX]

A little older, and some year duplication, but this is roughly when people retire in bubble format.

Loren

Your graph has 50-54 twice, with two different percentages.

[Loren Ver]

Yes, LIMRA's proof reading wasn't great, but I haven't seem an updated version. 

[Cassie]

I think of 65 as the normal retirement age. I worked for the state as did many of my friends so most retired before that.

[eyesonthehorizon]

That bubble chart Loren Ver posted is really striking. I never thought I'd want to be part of the 1%, but this is what wealth is really about. I want to be part of that 1%.

[NorthernIkigai]

That bubble chart Loren Ver posted is really striking. I never thought I'd want to be part of the 1%, but this is what wealth is really about. I want to be part of that 1%.

That’s a good point!

I’m wondering, though, how “retirement” is defined in that data. If and when I retire early, no one (other than I and other Mustachians) iis going to classify it as “retirement”: I won’t be eligible for any private or public pension payouts yet, I might have a company with very little activity, or even do some odd jobs for fun. Statistically, I’ll be seen as an underemployed person or failed entrepreneur who’s somehow been pushed out of the job market. My life will be good but it’ll look very bad on paper (since the official job statistics can’t see my stash…). I’ll even be a bad and poor consumer, oh no!

[eyesonthehorizon]

I've always proudly been a very bad consumer.

But you're right. I know I've been forced at work not to accept at least one thirty-something's self-report of being "retired" for their employment status, so surely it's underreported.

[NorthernIkigai]

I've always proudly been a very bad consumer.

Yes, sorry, I forgot about the existence of the sarcasm tag.

[clarkfan1979]

I have spent so much time on these forums and following communities like these that it never occurred to me that I don't actually know what age is "on-time" retirement. If someone had asked me yesterday I guess I would have answered 59.5 because that is when you can withdraw from retirement accounts without penalty. The article shared below seems to insinuate that even retiring at 65 is considered early retirement.

So what age is considered "on-time" retirement in America at large?

https://www.cnbc.com/2022/02/01/why-early-retirement-is-one-of-the-worst-money-mistakes-youll-regret-says-harvard-economist.html

If you define "on-time retirement" as good for your physical and mental health, everyone should try to transition to part-time work around age 50. Doing the corporate grind at 40-50 hours/week past age 50 is typically not good for your health.

[wageslave23]

I have spent so much time on these forums and following communities like these that it never occurred to me that I don't actually know what age is "on-time" retirement. If someone had asked me yesterday I guess I would have answered 59.5 because that is when you can withdraw from retirement accounts without penalty. The article shared below seems to insinuate that even retiring at 65 is considered early retirement.

So what age is considered "on-time" retirement in America at large?

https://www.cnbc.com/2022/02/01/why-early-retirement-is-one-of-the-worst-money-mistakes-youll-regret-says-harvard-economist.html

If you define "on-time retirement" as good for your physical and mental health, everyone should try to transition to part-time work around age 50. Doing the corporate grind at 40-50 hours/week past age 50 is typically not good for your health.

I'm 37 and have aches and pains from sitting at a desk job.  I don't think its good for your health at any age.

[jim555]

Social Security says 67 for me.