Retirement at age 65 may be a thing of the past. Americans are now delaying retirement until older ages than previous generations.
Among men working at age 64, the probability of retiring at age 65 has dropped from 56 percent for those born between 1913 and 1917 to about a quarter (26 percent) of men born between 1933 and 1937 and just 7 percent for the 1943 to 1947 born, according to a recent Urban Institute analysis.
Instead of jumping straight from full time work to full time retirement, seniors are becoming more likely to work part time in retirement. Over half of workers born in 1913 to 1917 left the labor force upon retirement and never returned to work. But only about a third of workers followed this traditional path into retirement 20 years later. More recent retirees are gradually shifting their balance of work and leisure time. Among those born between 1933 and 1937, 45 percent of working men and 41 percent of working women partially retired after age 50, compared with less than a third of men and a quarter of women 20 years earlier.
More Americans are also coming out of retirement than in the past. Over a quarter of those born between 1933 to 1937 returned to full time or nearly full time employment after fully or partially retiring, the Urban Institute found.
This trend appears to be continuing for current workers on the verge of retirement. Most older workers (88 percent) now plan to continue to work after they are eligible for full retirement benefits, according to a recent Kelton Research and Charles Schwab survey of 399 Americans between ages 50 and 60. Only 7 percent of those surveyed said they definitely would not work after they qualify for retirement payouts.
The financial benefits of delaying retirement are obvious. Many people planning to work past traditional retirement age list the need for more money (28 percent) and health insurance benefits (17 percent) as the most important reason for doing so. But almost the same number of people say they will delay retirement primarily to remain active mentally, physically, or socially (25 percent) or because they enjoy working (16 percent), Schwab found.
Most workers (74 percent) expect to be self-sufficient in retirement. Just 21 percent of employees think they will need financial support from others at some point during retirement. Yet, 44 prevent of those surveyed expect to enter their retirement years with debt.
Many people have changed their thinking about retirement since the recession began. Some 38 percent of current workers now say they will retire later than they planned to before the recession, the survey found. Some retirees are also considering returning to work part time (17 percent) or even full time (7 percent).