- Written by Terry Turner
Senior Financial Writer and Financial Wellness Facilitator
Terry Turner has more than 30 years of journalism experience, including covering benefits, spending and congressional action on federal programs such as Social Security and Medicare. He is a Certified Financial Wellness Facilitator through the National Wellness Institute and the Foundation for Financial Wellness and a member of the Association for Financial Counseling & Planning Education (AFCPE®).Read More
- Edited ByLamia Chowdhury
Lamia Chowdhury is a financial content editor for RetireGuide and has over three years of marketing experience in the finance industry. She has written copy for both digital and print pieces ranging from blogs, radio scripts and search ads to billboards, brochures, mailers and more.Read More
- Financially Reviewed ByStephen Kates, CFP®
Stephen Kates, CFP®
Certified Financial Planner™
Stephen Kates is a Certified Financial Planner™ and personal finance expert with over a decade of experience working with individuals and families who need help with their finances. With experience as a financial advisor for two of the largest financial firms in the country, Stephen has worked with hundreds of clients to build comprehensive financial plans to grow and protect their wealth.Read More
- Published: April 30, 2020
- Updated: September 8, 2022
- 9 min read time
- This page features 24 Cited Research ArticlesKey Takeaways
- Full retirement age in the United States refers to the age at which you can draw your full Social Security benefits.
- Continuing to work beyond full retirement age can allow you to receive higher Social Security benefits while continuing to build a larger nest egg with your retirement savings.
- The optimum retirement age varies from person to person and your health, financial stability and many other factors affect what age is the best time for you to retire.
What’s the Full Retirement Age?
Full retirement age is the age at which you can start drawing the full amount of Social Security benefits. For people born in 1960 or later, it’s 67. For people born in 1954 through 1959, the full retirement age is 66 — but it increases by months after your birthday depending on which of those years you were born in.
You can file for Social Security as early as age 62 — called early retirement — but you’ll receive reduced Social Security benefits. You can also wait until after your full retirement age — called delayed retirement — and receive increasingly larger benefit payments the longer you wait up until age 70.
Full Retirement Ages Based on When You Were Born
Birth Year Full Retirement Age 1943 through 1954 66 years 1955 66 years, 2 months 1956 66 years, 4 months 1957 66 years, 6 months 1958 66 years, 8 months 1959 66 years, 10 months 1960 and later 67 years
Social Security is only one part of your retirement planning. Other factors may help you decide on the right time for you to retire.
The average age Americans retire is 62, according to Gallup’s 2021 Economy and Personal Finance survey.
The dream for many workers is to retire young and live a life of leisure, enjoying the fruits of a career and working through a bucket list, or relaxing by the beach.
But financial and health considerations may make that dream unachievable for many Americans. And others prefer to keep working as long as possible because they enjoy the feeling of productivity and a sense of identity through their careers.
The decision is ultimately up to you, but there are important factors to consider about your physical and financial health when deciding what age to retire.
Average Retirement Savings by Age
On average, Americans had $98,800 in retirement savings in 2021, according to Northwestern Mutual’s 2021 Planning and Progress Study.
Data in the Federal Reserve’s Survey of Consumer Finances can be broken down to give an estimate of retirement savings by age.
It’s difficult to pin down exact figures for how much Americans have saved for retirement. Savings depend on individual financial situations and retirement goals — among many other factors.
Simply put, it means figuring out how much income you’ll need each year in retirement and multiplying it by 25. This should give you a grand total that will allow you to withdraw 4% of your savings each year — and it should last for 30 years.
Pros & Cons of Retiring at Different Ages
There are advantages and disadvantages to retiring at different ages. These often involve the amount of income you’ll have based on when you retire. Your health and life expectancy may also play a role in the pros and cons of retiring at a particular age.
Pros and Cons of Retirement Based on Different AgesBefore 65Pros
- Enjoying retirement sooner
- Longer retirement
- Taking advantage of typically better health upon retirement
Full Retirement (age 66 - 70)Pros
- Working longer may result in better health and happiness
- Less time to save and potentially less money in retirement
- Lower Social Security benefits
- Unable to enroll in Medicare until you are 65
- Maximizes Social Security benefits
- Can enroll in Medicare at a cheaper rate than most private health insurance plans
- Retirement savings given more time to mature
- Allows you to take advantage of “catch-up contributions” to retirement plans, maximizing retirement accounts
Delayed Retirement (Over 70)Pros
- Less time to enjoy retirement
- Better quality of life if you enjoy your work
- You’ll have more money from both job income and retirement savings
- You draw the maximum amount possible in Social Security benefits
- Retiring later in life means you have a shorter time period to depend on your savings.
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- Social Security delayed retirement increases top out at 70
- Continuing to work can increase your income taxes as you take required minimum distributions (RMD) from retirement accounts
There are obviously lots of reasons to want to retire early. At a minimum, once you can live off your savings, you no longer have to worry about losing your job.
For many, retirement means freedom.
Your time becomes your own, and you can pursue what makes you happy. You can enjoy your leisure time before your health begins to decline.
The concept of retiring young has exploded in recent years from being able to retire in your 40s and 50s to some being financially able to retire as early as their 20s and 30s.Did You Know?Approximately 24.29% of Americans ages 17 to 55 are retired, according to a 2017 Federal Reserve Survey of Household Economics and Decisionmaking.Source: U.S. Federal Reserve
Very early retirement is becoming trendy to the point that it’s gotten an acronym — FIRE — for Financial Independence Retire Early.
The idea is to build up enough savings to be able to live comfortably without having to hold a job. There are several online communities built around the idea of reaching financial independence in as little as 10 years of work.
People in the FIRE movement work multiple jobs, find ways to earn money from their hobbies, invest aggressively and live frugally to get to the point where they feel they have enough money to attain financial freedom.
The earlier you retire, the more money you need to save. This is because your money will have less time to grow and will have to support you for a longer amount of time.
You won’t be able to collect Social Security to supplement your savings until you’re older. And when you’re old enough to collect Social Security, the amount will be reduced or perhaps even be eliminated by the fact that you spent fewer years in the workforce.
Social Security allocations are determined, in part, by averaging 35 years’ worth of earnings. For each year short of 35 that you worked, your earnings will be zero, which will significantly affect your average.Did You Know?The normal retirement age (NRA) — also referred to as the full retirement age — for anyone born after 1959 is 67 years old. The NRA is the age at which people can receive full Social Security benefits after leaving the workforce.Source: Social Security Administration
In addition, people with children can’t save money and live as frugally as others. And for people who live in areas where the cost of living is higher, spending more is unavoidable.
For these reasons and others, most people will be unable to retire young.Advertisement
COVID-19 Led to Increase in Early Retirements
The U.S. Federal Reserve estimates that the COVID-19 pandemic led to 5.8 million fewer Americans in the labor market by mid-2022. An estimated 70% of those former workers were 55 or older, according to a study by investment banking firm Goldman Sachs.
That suggests COVID-19 led to a rash of early retirements between 2020 and 2022.
A strong stock market and rising housing prices may have allowed a lot of people to consider early retirement during the pandemic.
Delaying retirement can improve a retiree’s financial outlook. There are several reasons for this.
Researchers at the National Bureau of Economic Research found that a 66-year-old who works just one year longer and delays taking Social Security by one year will see a 7.75% increase in retirement income adjusted for inflation.
Social Security benefits account for 83% of that increase.
On the other end of the spectrum, several factors have left some people feeling like they have no choice but to keep working and delay retirement.Factors That Delay Retirement
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- Decline in pensions
- Low retirement savings rates
- Incentives in Social Security
- Less physically demanding jobs
When Delaying Retirement Isn’t an Option
Delaying retirement is often not an option for many. According to research by the Urban Institute, even though life spans have increased since Social Security was first introduced, there is little evidence of improvement in the ability of people to work at older ages than in the past.
A little more than a third of nondisabled workers develop work limitations related to their health by age 65.
In addition to health limitations, finding and keeping a job is more difficult for many older Americans due to ageism in the workplace.
Older workers who lose their jobs face an uphill battle to find new ones.Laid-Off Workers from 2008 to 2012
Ages Remained Out of Work for at Least 12 Months 25 to 34 35% 35 to 49 39% 50 to 61 47% 62 and older 65%Source: Urban Institute, 2018
Frequently Asked Questions About When to RetireWhat is the full retirement age for Social Security?The full retirement age for Social Security depends on when you were born. People born in 1960 will reach full retirement age when they turn 67. People born in 1943 though 1954 reached full retirement age when they turned 66. For people born in 1955 through 1959, they reach full retirement age at some point between their 66th and 67th birthdays, depending on the year in which they were born.Does where you live affect your retirement age?No matter where you live in the United States, your full retirement age and benefits remain the same.How much money should you have when you retire?Financial professionals recommend that your retirement income should be 80% of the income you earned in your last full year before retirement. If your annual income was $100,000 in that last year, you’ll need $80,000 a year in retirement to live comfortably. You may also consider the “Rule of 25.” Figure out how much you’ll need each year to live comfortably in retirement and multiply that annual retirement income by 25 to determine how much you should have saved before you retire. You should be able to withdraw 4% of your savings each year for 30 years using this formula.Can I work after full retirement age?You can continue working after full retirement age and still receive full Social Security benefits. If you are younger than full retirement age, your benefits will be reduced. If you are at full retirement age or older, you can work and collect 100% of your Social Security benefits no matter how much you earn at your job.Advertisement
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24 Cited Research Articles
- Osterland, A. (2022, April 11). Are You Saving Enough for Retirement? Odds Are, Probably Not. Retrieved from https://www.cnbc.com/2022/04/11/are-you-saving-enough-for-retirement-odds-are-probably-not.html
- Morrow, A. and Tappe, A. (2022, January 7). How Millions of Jobless Americans Can Afford to Ditch Work. Retrieved from https://www.cnn.com/2021/12/15/economy/labor-force-retirement-great-resignation/index.html
- U.S. Social Security Administration. (2022). How Work Affects Your Benefits. Retrieved from https://www.ssa.gov/pubs/EN-05-10069.pdf
- Gregory, V. and Steinberg, J. (2021, October 4). Lavor Force Exits and COVID-19: Who Left, and Are They Coming Back? Retrieved from https://www.stlouisfed.org/on-the-economy/2021/october/labor-force-exits-covid19
- Brenan, M. (2021, May 18). U.S. Retirees’ Experience Differs from Nonretirees’ Outlook. Retrieved from https://news.gallup.com/poll/350048/retirees-experience-differs-nonretirees-outlook.aspx
- Board of Governors of the Federal Reserve System. (2019, May 23). Survey of Household Economics and Decisionmaking. Retrieved from https://www.federalreserve.gov/consumerscommunities/shed.htm
- Chen, S. (2019, February 11). Achieving Financial Independence at Any Age. Retrieved from https://www.forbes.com/sites/stephenchen/2019/02/11/achieving-financial-independence-at-any-age/?ss=retirement#5a5d44545a62
- Social Security. (2019). Your Retirement Benefit: How It’s Figured. Retrieved from https://www.ssa.gov/pubs/EN-05-10070.pdf
- Social Security. (2019). When to Start Receiving Retirement Benefits. Retrieved from https://www.ssa.gov/pubs/EN-05-10147.pdf
- Johnson, R. W. (2018, November 16). Is It Time to Raise the Social Security Retirement Age? Retrieved from https://www.urban.org/research/publication/it-time-raise-social-security-retirement-age
- Zulkarnain, A. and Rutledge, M.S. (2018, October). How Does Delayed Retirement Affect Mortality and Health? Retrieved from https://crr.bc.edu/working-papers/how-does-delayed-retirement-affect-mortality-and-health/
- United States Census. (2018, July 1). Quick Facts United States. Retrieved from https://www.census.gov/quickfacts/fact/table/US/PST045221
- Newport, F. (2018, May 9). Update: Americans’ Concerns About Retirement Persist. Retrieved from https://news.gallup.com/poll/233861/update-americans-concerns-retirement-persist.aspx
- Belsie, L. (2018, May). Working Longer Can Sharply Raise Retirement Income. Retrieved from https://www.nber.org/digest/may18/working-longer-can-sharply-raise-retirement-income
- Social Security. (2018). Fast Facts & Figures About Social Security, 2018. Retrieved from https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2018/fast_facts18.html#pagei
- Centers for Disease Control and Prevention. (2017, March 17). Life Expectancy. Retrieved from https://www.cdc.gov/nchs/fastats/life-expectancy.htm
- Johnson, R.W., and Smith, K. E. (2016, February 9.). How Retirement is Changing in America. Retrieved from https://www.urban.org/features/how-retirement-changing-america
- Mather, M. (2016, January 13). Fact Sheet: Aging in the United States. Retrieved from https://www.prb.org/resources/fact-sheet-aging-in-the-united-states/
- Social Security. (2015, May.) Thinking of retiring? Retrieved from https://www.ssa.gov/osss/prd/pdf/en/55-plus-insert.pdf
- Rosato, D. (2014, July 29). How Much Money Do I Really Need to Retire at 55? Retrieved from https://money.com/early-retire-55-how-much-need/
- Celidoni, M., et al. (2013, December 19). Early retirement and cognitive decline. A longitudinal analysis using SHARE data. Retrieved from https://economia.unipd.it/sites/decon.unipd.it/files/20130174.pdf
- Social Security. (n.d.). Full Retirement Age. Retrieved from https://www.ssa.gov/planners/retire/retirechart.html
- The American Institute of Stress. (n.d.). The Holmes-Rahe Stress Inventory. Retrieved from https://www.stress.org/holmes-rahe-stress-inventory
- Social Security Administration. (n.d.). Normal Retirement Age. Retrieved from https://www.ssa.gov/OACT/ProgData/nra.html
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