Jessica Hall
The idea of having a single retirement age has become obsolete
There are many numbers to deal with when it comes to retirement, but age can be an outdated number as many people are working past the traditional retirement age.
Although retirement is illegal in most cases, it still exists in some professions, such as pilots, air traffic controllers, federal law enforcement officers, forest rangers, some state judges, and law firm partners. increase.
“Sixty-five doesn’t make much sense anymore. It’s not even the age to claim full Social Security retirement benefits. It’s becoming a meaningful age,” said Patrick Button, an associate professor of economics at Tulane University who studies ageism.
The retirement age debate comes as the United States faces its own retirement crisis. Traditional pensions have all but disappeared, workers are responsible for accumulating the bulk of their retirement funds, and Social Security health is at stake, but Americans are living longer.
Read: It’s about work, not age: Diane Feinstein and the question of age at retirement
In the United States, the age of full retirement, the age at which people born after 1960 can start claiming full Social Security benefits, has risen to 67.
“A compulsory retirement age is usually a bad policy, because the ability to work and the interest in working varies greatly by age and by person. Retirement is becoming less than optimal: Older people often want to work longer because they have a lot of work skills, experience, and work interests.
“In other cases, you can’t retire at 65 because you can’t make a living out of retirement,” Button said.
If you’re not sure if you can retire, read our Help me retire column.
The Social Security Act of 1935 set the minimum age for receiving full retirement benefits at 65. But at that time, the American male life expectancy was 59.9 years.
“When Social Security started, people weren’t living very long and they didn’t have much quality of life left,” said Joanna Lahey, professor at Texas A&M University’s Bush School of Government and Public Services. . Lahey is an expert on ageism and the relationship between age and the labor market.
Currently, life expectancy in the United States is 76.1 years, according to the Centers for Disease Control and Prevention. 79.1 for women and 73.2 for men.
French President Emmanuel Macron’s unpopular plan to raise the retirement age in France from 62 to 64 sparked nationwide protests but was enacted into law on Saturday. It is possible to raise the retirement age.
READ: French President Emmanuel Macron sets an example: Raising the retirement age could solve financial and demographic problems, even if workers hate the idea
Some politicians have brought up the idea of raising the full retirement age in the United States as a fix for the Social Security system. The Social Security Joint Trust Fund will be depleted in 2034, a year earlier than expected, at which point 80% of benefits will be paid.
“People are living longer, healthier lives,” says Joe Casey, managing partner of Retirement Wisdom in Princeton, New Jersey. I will do it,” he said.
As far as Social Security is concerned, raising the retirement age may be a good solution for people with desk jobs. Manual labor workers, however, cannot continue their manual labor careers for long.
As a result, raising the full retirement age “is disproportionately dependent on those who are not wealthy or have hard jobs. This is highly controversial and unfair to many people.” said Casey.
Even the concept of executive retirement age is changing.
CEOs and board members of many companies are still subject to mandatory retirement at age 65, but some recent exceptions include Target, Caterpillar and Boeing, where CEOs have been working longer. I changed the rules to allow it. When Bob Iger, 71, returned to his CEO role at Disney, his age didn’t disqualify him. And, of course, Warren Buffett still runs Berkshire Hathaway at 92.
According to a 2022 study by executive search firm Spencer Stuart, the average tenure was 10.2 years, and the average age of S&P 500 CEOs was 62.6.
“People who make a lot of money and make a lot of decisions, we don’t care. They’re rich and powerful. They’re fine,” Lahey said.
“There is this idea of retiring with dignity. For most of us, most people need money more than dignity,” Lahey said.
Questions about retirement, social security, where to live or how you can afford it? Contact us at HelpMeRetire@marketwatch.com. I may use your question in a future article.
-Jessica Hall
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04-22-23 1326ET
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