Baby boomers, those folks born between 1946 and 1964, are retiring at increasingly later ages because they simply can’t afford to stop working.
More than 25% plan to work until age 70, which is a much higher proportion than in recent years. The statistics seem to indicate not having money for their retirement is a major factor for delaying it.
A recent GOBankingRates survey found that more than 24% of people 55 years and older have no retirement savings at all, and less than 50% have more than $50,000 saved for retirement. A 2016 study from the Insured Retirement Institute (IRI) had an even more grim perspective, finding that 45% of Boomers have no money at all saved toward their retirement, whereas in 2014, 80% of respondents had money put away towards their retirement.
The same IRI study noted that during 2016 approximately 3 out of 10 baby boomers postponed retirement plans. For so long, age 62 was known as the “retirement” age, but now 6 out of 10 boomers are planning to retire at 65 or later, including 26% of boomers that anticipate retirement at age 70 or later. In 2011, only 17% of boomers expected to retire by age 70 or later, according to IRI.
Much of this can be blamed, perhaps, on the social security laws having changed.
In 2000, the U.S. Congress decided that, starting that year, the full retirement age would increase from 65 to 67, incrementally, over a 22-year period because health, health care and life expectancy had improved over the decades.
To get maximum Social Security benefits people should work until their full retirement age. So before you had to be 65 years old to receive full benefits, but now, the full benefit age is 66 for people born in 1943-1954, and it will gradually rise to 67 for those born in 1960 or later.
Social Security allows for early retirement at 62 years old, but 30% of benefits will be lost for that year. And each year leading up to the age of 66 the amount deducted will be lowered, based upon the individual’s year of birth.
Another factor is the significance of the age 70. The greatest amount of Social Security retirement benefits begin at 70. There are no additional increases after age 70, so it is ideal to get paid right when turning 70. Bottom line – the longer you delay activating Social Security benefits up to the age of 70, the greater the return.
All in all, there are a variety of reasons Baby Boomers are retiring later, though it does appear that money is the main one. The good news is that people are living longer, are healthier, and working later into life is sometimes seen as evidence of that increased vitality.
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