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I often read on HD and elsewhere about retirement and plans to retire in the early 60s and quite often in the 50s even a rare 40s. What happened?
We live longer, we are able to sustain our health and stamina longer in most cases, many jobs have become less physically demanding than in the past and yet age 55 seems to be the new 65 for retirement – or has it?
One would think with the above changes and the generally poor nature of retirement financial planning, we would be moving the retirement age up.
Why do people think they can retire in their 50s and financially sustain themselves for thirty plus years? I wonder if there is sufficient experience out there to answer that question?
My perception may not be reality though. I don’t think anyone knows the accurate average retirement age. I searched and found both 64-67 and age 62. One site said retirement age is actually increasing.
Perhaps we are more exposed to the early retirement success stories which are increasingly not average. Maybe my retiring at 67 was not as abnormal as I thought.
I retired the first time at age 47. It was wonderful…until it wasn’t. I played every day doing anything I wanted. But, all my friends were still working so there was no playing with them and playing by myself quickly grew stagnant. After 8 months I compensated by finding two FT work situations and maintained those until I completely retired at age 61.
I was fortunate that I hadn’t burned any bridges, could return to my vocation and that age was not a barrier.
Early retirement ain’t for sissies.
I think this is largely spot on. What you may be “missing” could be that with our advancing technology and access to the internet more people are reaching and reaching out for the “self-actualization” phase of life. We don’t want to grind it out until we’re 65 or whatever.
The people are really talking about FIRE and the like are saving like crazy in order to finance their long retirements. I know, as I’m one of them. We’re at over 35% savings rate, which is considered low in some FIRE circles.
But I think that you’re right. Somewhat paradoxically, the actual retirement age is increasing. This is likely due to two factors: (1) there are still many people who simply don’t want to ever quit working, so they charge on; and (2) the masses who are not like me are not saving enough to retire at almost any age, so they have to keep working.
I mostly lurk on this forum but was motivated to reply to represent early retirees like me. I retired in my 50s because I had saved more than enough in both tax deferred and brokerage and was thoroughly fed up of work. I realize that this forum skews towards people retiring at a conventional retirement age but there are other forums like Mr Money Mustache where you can see many example of people retiring early and enjoying their retirement
I’ve visited that site and others similar and found the definition of retired is stretched quite a bit. Generally, not actual retirement but more like working on their terms. Heck even MMM makes money blogging. That’s working.
I know a guy who retired at age 54. He sold his half of a company, and invested the money in Apple, Google and Amazon. Not surprisingly, at age 74 he has assets well into 9 figures.
Don’t try this at home!
“,,,plans to retire in the early 60s and quite often in the 50s even a rare 40s. What happened?”
Nothing happened. The desire to retire early has always been around. That has not changed, and probably will not change in the future. The internet and social media make it easier to dream.
That dream needs to be backed up with resources of various kinds and generally, Americans don’t seem to be linking the dream and the reality of all that goes with longevity in retirement.
The average retirement age may or even should be moving up for the reasons you state. As for Humber Dollar readers, the idea that a higher than average number may be retiring earlier really should not be that surprising. I suspect many readers here are above average savers/planners. I see no disconnect. You are simply trying to compare a small group to the total group and are surprised that differences could exist.
“Early retirement” has decreased significantly over the past two decades: the percentage of people retiring between ages 50-54 has declined from 9% to 6%, and the rate of people retiring between ages 55-59 has dropped from 19% to 11%.
From https://www.guardianlife.com/retirement/average-age
In terms of all the FIRE people (financial independence, retire early), these are conscious choices, by a very small group of people, who frequently actually work (earn) in retirement. They often don’t consider, for example, owning 5-10 rental units and handling all the repairs and work as a job. They’re best thought of as retired from working for other people.
That’s the same source I linked to in my post.
I thought the quote was informative.
We are all different. Why should there be one “right” retirement age for everyone?
Some people have four kids and pay for them to go to expensive colleges. Some people have no kids.
Some people have intellectual jobs they could still handle in their eighties. Some people have physically demanding jobs they can’t handle in their sixties.
Some people are savers and some are spenders.
Some people enjoy good health as they age and some people have serious health challenges when they are young adults.
There is no one right age.
“Why do people think they can retire in their 50s and financially sustain themselves for thirty plus years?”
Because some people do it successfully, despite your doubts. I’ve written here before about how well it worked out for me. Also, you retired at 67, and you also had a chance of living another 30 years.
Who said there should be one right retirement age?
Do we have a lot of data on thirty-year retirements beginning in the fifties? I don’t know.
I don’t even know if when the 30 years of retirement begins matters except perhaps less time to accumulate resources or missing highest earning years for SS.
First, since I retired from my full-time job at 53, my retirement could well last over forty years, not thirty.
Second, if you don’t think there is a “right” age for retirement, why are you upset about people retiring in their 50s, or even earlier? You keep complaining about it.
I surrender. Not upset, just curious and surely nothing for me to complain about. Being able to retire at 53 is quite an accomplishment and certainly not typical. Aim for 40+ plus years.
But again your tone with the “what happened?” is that it’s somehow a negative development.
It’s not negative it’s just the resources and access are out there for those that want to make it their life plan e.g. low cost index funds without a broker rake in contrast to the investment industry of old.
Not everyone wants to suck on a corporate teat for longer than they absolutely have to and people are more educated thanks to lot of great personal finance research out there that there are multiple ways of skinning the cat beyond work for a company with a good pension all your life ( who anyway have ditched those gold plated pensions).
When you have “enough” work is a matter of choice. Remember staying working is a risk too, all those hopes and dreams you leave behind for a nice casket if you are unfortunate with health in your 60s.
You’ve repeatedly told us how happy you are that you worked til 67. Good for you. But you’ve also told us that mgt/ways or working changes made you glad you left when you did. Well 15 years on, corporate workplaces haven’t become fun palaces and it’s easy to feel washed up past 50 as the cult of youth is worshipped.
Remember in the end every cent that you ( or your spouse if they survive you) leaves behind represents a moment that in hindsight you/they need not have worked.
If you perceive a tone in What happened? I can’t help it. There was no tone, just a simple question, but as you read later my assumption that we were headed to more ER was apparently inaccurate. So, perhaps what happened is nothing.
My perception is that ER is a luxury that few can afford, but for those who can, go for it.
But I sense your definition of “afford” is very different from mine, despite the fact that as you clearly enjoy telling everyone you sit on ample surpluses.
A little thought experiment for you. Assuming you hadn’t had a corporate pension, what amount in 401k, IRAs and other vehicles etc would have led you to conclude you could “afford” to retire at 67?
An excellent question which I can’t answer.
Knowing my desire to try and cover all bases and risks I’m not sure there is a number, but I suspect it would an amount to buy an annuity generating very close to my salary.
I often wonder if people seeking to retire at say 55 or before really consider all the possible issue they may face over a retirement perhaps longer than working years.
I acknowledge I am conservative with finances, but it comes in part from my family’s experience and years and years of working with thousands of retirees, many who did not think it through and regretted their choices and all of whom had a pension.
Who are the most vocal about inflation. a Social Security COLA, Medicare premiums, prices? Retirees from what I read and observe. I used to collect all the letters I received from retirees begging for a COLA on their pension, including those with a 401k and employer match as well.
I didn’t want to be like those retirees or my parents so I did everything I could to provide as much insulation from life and economic events as possible for the both of us and if necessary Connie alone.
We had no desire to change any of our lifestyle upon retirement and we didn’t- no cutting back, no required downsizing or relocation, no budget, no tracking spending and no worry about inflation.
The price of that was our lifelong lifestyle, retirement at 67 after nearly 50 years, and more prudent use of money while working than others might find acceptable, including saving most of my non-cash compensation and living on base salary alone. We lived on one income for all our marriage except the first year.
Have we missed out in some way? Not sure, but if we have, we don’t know it.
BTW, I draw your attention to “The Three Boxes of Life – And How to Get Out of Them” by Richard Bolles, the “What Color is Your Parachute” guy. Writing in 1978, he suggests that instead of treating education, work and retirement as separate and consecutive life stages, we should intersperse them. I suspect that’s what is happening now. My 30 year tenure with one company, never mind your 50 years, is becoming increasingly rare. Employees have become fungible, like money, and younger employees are cheaper. If someone takes a buyout at 40, hangs out in southeast Asia for a while, and then reinvents herself as a part-time digital nomad, more power to her.
Actually, people like us who stuck with a company were always rare. I thought that length of employment with a company had been declining, but it turns out the average tenure of 3-6 years or so has pretty much been steady for decades.
Depends on the company. People at mine stuck around for decades. One reason I took early retirement was seeing too many people retire at 65 and six months later either drop dead or come back to work.
BTW, I retired from the megacorp October 1st, 2000, so I have now been retired for 24 years. Short of a black swan event I figure I should make the next six OK.
I think it’s a fair point. Obviously Mr Quinn has some survivor bias in telling us how well it worked out for him.
We made very different decisions and we’re both happy, which reinforces my point that there is no one “right” age. Unfortunately, too many people find they don’t really have a choice.