A Senior Moment

Richard Connor

I HAVE A MILESTONE birthday this month—turning age 65. This has long been considered the standard retirement age.

When the Social Security Act was signed into law in 1935, 65 was the age at which workers could receive retirement benefits. Many companies’ defined benefit pension plans still use 65 as the age at which employees can receive an unreduced pension. And 65 is the age at which folks become eligible for Medicare.

This is also the median age at which workers expect to retire, according to the Employee Benefit Research Institute. Its annual survey, however, regularly finds that workers’ expectations don’t match reality: The median retirement age is, in fact, 62.

Why do so many workers end up retiring earlier than they expected? Some are forced into early retirement by ill-health. Sometimes, their job disappears. The pandemic is also cited as the reason so many have lately opted to retire. I feel like I’ve had a front row seat from which to observe these changes in the work world and also our changing conception of retirement.

During my final years in the workforce, I saw a trend toward hiring younger workers. In some ways, this made sense. We were a technology-driven firm, and young software engineers became a bigger part of the company’s workforce. The government systems we worked on had also matured, and the company didn’t need as many senior engineers to maintain and enhance those systems. I spent my last few years in the workforce winding down a major systems engineering program. Fifty employees had to be let go. Many found other jobs, but some decided to start retirement, albeit a bit earlier than they had planned.

That was a few years before the pandemic, which has further transformed the work and retirement landscape. It seems many older workers decided they’d had enough and were ready for something else.

While the retirement age was set at 65 when Social Security was created, that changed with legislation passed in 1983. In the years since, the full retirement age has gradually climbed. For instance, for anyone born in 1960 or later, the full retirement age is now 67.

This gradual rise in the full Social Security retirement age has changed retiree behavior. Among those signing up for benefits in 2005, 54% of women and 50% of men were age 62, the earliest possible age. But by 2018, those figures had fallen to 31% for women and 27% for men. It seems retirees are heeding the message that claiming early means a permanent reduction in their monthly government check.

Folks are also approaching retirement differently. Last year, my wife did what workers have traditionally done—go cold turkey. Quitting her job was a great decision for her, and she says she’s never felt such peace of mind. But I’ve taken a more gradual approach, moving from fulltime employment to part-time gigs as a way to ease the transition and keep some income coming in. This has, for me, made the shift to retirement much easier to cope with.

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