Baby Boomers are hitting retirement age, but most of them aren’t actually retiring. What gives?
According to Gallup, the average U.S. retirement age is now 62, the highest it’s been since Gallup started its poll in 1991 and the average retirement age was 57. The age at which Americans expect to retire is on the rise too—66 years old, compared to 63 in 2002.
Why are Baby Boomers staying in the workforce longer than previous generations? Experts and financial advisers say the shift can be attributed to several factors:
- Good health. Boomers are in better shape than their parents’ generation, so old age-related ailments aren’t forcing them to stop working.
- Social Security incentives. Boomers see a 32 percent increase in their monthly benefit if they wait until 70 to start collecting, giving them extra reason to keep working. As a result, the Center for Retirement Research has found a decline in the number of retirees claiming at 62 among Boomers and a significant increase in claims occurring at 65 and 70.
- Savings shortfalls. The last recession, as well as the steady decline in pension plans, has left many retirees with smaller nest eggs than they expected. One study found that Baby Boomers said they want to have $45,500 in annual retirement income. However, their average nest egg was just $136,200, enough for $9,129 in annual income.
- Unfinished business. Some Boomers say they haven’t yet accomplished all of their career goals. Others are interested in spending some time in a second act career, pursuing new interests and causes before they call it quits.