Changing Retirement Age

Another factor helping to shape the face of the new retiree is the age at which people retire. Most people still consider the normal retirement age as 65. This threshold is even written into law: Social Security long used age 65 as the defining point for retirement, though it is slowly inching upwards. Federal income tax laws are written to provide additional benefits for those who are 65 and older. Most employer-sponsored pension plans also define retirement age (the age at which benefits are paid) as 65.

The age at which people actually retire, however, is much different. While around one-third of workers report that they plan to continue working past age 65, over two-thirds of individuals actually retire well before this age. In fact, the average age at which people retire is currently age 62.

Retirement is generally viewed as more attractive today than it was one or two generations ago. Many people, notably those who feel financially prepared and secure, look forward to crossing the threshold into retirement, and they are often embracing it at earlier ages.