May 8, 2023

Ep 117: What is Your Ideal Retirement Age?

Ep 117 What Is Your Ideal Retirement Age Cover

In today’s episode, we discuss what is your ideal retirement age. We take a look at retirement in the United States and how it’s shifting. Join us as we take a dive back to where it came from and how we got here. 

We borrowed a lot of this from an article in The New York Times last week titled What Age Should You Retire? What Health Experts Say

We take a look at some of the non-financial issues with changing retirement age.

Did you know that the retirement age was originally set by politicians?

    • SSA in 1935 set it at 65 when less than 60% of Americans were expected to live that long
    • Designed to provide a few years of coverage for “the lucky few” who lived long enough
    • Since SS full – retirement age was set at 65, life expectancy has risen 16 years
    • Now many American live years/decades in retirement
  • Created huge political strains on retirement systems
    • US SSA expects funds depleted and benefits cut by 2032
    • France experiencing political protests on a large scale over moving the retirement age
      • Retirement age is 62, but life expectancy is 82!

What is your Work-Life Expectancy?

    • How long can you remain healthy and disability-free?
      • Gal Wettstein, Center for Retirement Research at BCU
      • Found if an American is healthy at age 50, roughly 23 years of being disability-free plus eight years with that disability. Suggests WLE = 73
    • Partly medical advances partly change how we work (service/knowledge)
    • In Knowledge-based jobs, working into your 70s is reasonable from a cognitive perspective
      • Lisa Renzi – Hamilton, Inst of Gerontology at U of GA
      • We remain capable cognitively well into the 70s
      • Her research shows while some brain functions diminish after 45, others including accumulated knowledge and social cognition continue to improve for decades
      • These processes are actually maintained and strengthened at work
      • The article also cites a study showing delayed retirement led to better health outcomes and delayed risk of death, regardless of health prior to retirement
  • When discussing appropriate retirement ages, it is also important to discuss inequities
    • Physical jobs vs. knowledge-based jobs
    • Gender and race differences
  • What is the real goal of Social Security? How do we, as Americans want retirement to look?

Additional Thoughts

  • Keep in mind that part of what made Social Security acceptable to Americans was that they were essentially told they’d save their money via taxes and then get it back in retirement, not seen as a redistribution of wealth
  • That has changed with the taxation of benefits and by the way the formula credits benefits
  • The Americans that are often forced to retire earlier for physical reasons are also those who are the least able to afford to do so.


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