Average retirement age continues to climb

Working longer can lead to much higher monthly pension benefit

By Michael Pramik, Ohio Public Employees Retirement System

July 25, 2022 – Americans are continuing to realize the advantages of working longer before retiring. The American Enterprise Institute said in a recent report that Americans’ average age of retirement has increased from 62 to 65 over the past 30 years.

The research center found that women retire earlier than men but have had a larger increase in average retirement age. In 1990, women retired at an average age of 59.5. That increased to 63 years of age by 2020. Men’s average retirement age increased from 62.6 to 65.6 over that span.

Reasons for the retirement age increasing, the study states, include “improved health and longevity, less physicality in work, changing pension and Social Security incentives, tighter administration of disability insurance programs, new antidiscrimination laws, changing social norms, and new health insurance features and costs.”

OPERS promotes the advantages of working longer. Those extra three years of public employment can significantly increase our members’ monthly retirement benefit. Members can see how by checking the front page of their annual statements and comparing their earliest retirement eligibilities with both a reduced and unreduced benefit.

For example, a member in retirement Group C with a final average salary of $50,000 would earn a monthly pension of $1,079 if he or she met the minimum requirements for a reduced benefit. However, the member would earn a monthly benefit of $2,938 by working additional years to meet the minimum requirements for an unreduced benefit.

Even in retirement, many plan to continue working. AARP said its research indicates more than half of active workers over 50 expect to hold some type of job when they do retire.

AARP also said that 29 percent of current retirees either hold some kind of job or believe they will have to in the future, for financial reasons.

Michael Pramik

Michael Pramik is communication strategist for the Ohio Public Employees Retirement System and editor of the PERSpective blog. As an experienced business journalist, he clarifies complex pension policies and helps members make smart choices to secure their retirement.

Michael Pramik

Communication Strategist

4 thoughts on “Average retirement age continues to climb

  • July 25, 2022 at 4:23 pm
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    Would a person in group C who leaves employment and then just waits till age for unreduced pension have (with same scenario) have much higher pension than person taking immediately (reduced)? It seems that most of loss in earnings is due to getting immediate payments.

    Reply
    • July 27, 2022 at 3:21 pm
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      Clyde, Please forward your question through your OPERS online account message center or contact our member service center at 1-800-222-7377 for further assistance.

      Reply
  • July 25, 2022 at 4:37 pm
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    Thank you very much for that information that is very very interesting but I would say that most male and female are working longer and working into their early ’70s before they retire so I think that story is a little off course so I think that story is a little off course

    Reply
  • July 28, 2022 at 10:18 am
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    Reasons for the retirement age increasing, the study states, include “improved health and longevity, less physicality in work, changing pension and Social Security incentives, tighter administration of disability insurance programs, new antidiscrimination laws, changing social norms, and new health insurance features and costs.”

    I couldn’t help but notice the excellent “wordsmithing” in the above statement. Let’s face it, the most common reason(s) for the retirement age increasing is money. Or more specifically, the lack thereof. Increases in health care costs, along with sky-high inflation, are taking huge bites out of retirees available fixed income streams. I especially like the “new health insurance FEATURES”, which to most of us, simply means less coverage and higher premiums. “Changing pension…incentives” is another good one. Most folks try to plan carefully for retirement using the best currently available financial/benefit data to ensure there will be enough cash flow, but even the best laid plans can be adversely affected by unforeseen, outright cuts. Also, attempts at “back-door” type cuts are sometimes in play. For example, in terms of outright cuts, witness the recent successful effort to reduce retirees HSA benefit. In my case, that amounted to a 28% cut! Not 5, or 10, or even 15%. While grateful for any amount of HSA funding, that is a HUGE cut. One reason cited by OPERS was that most retirees had a year-to-year positive balance in their HSA account. Well, suffice to say that most of us (myself included) no longer have that “problem” with their HSA account. Mine stands at “0” dollars as I type this. That money now has to come from somewhere else in my budget. When on a fixed (retired) income, exactly where do you “find” the funds to replace it? And let’s not forget the recent effort to “reimagine” (I really dislike that word…) the promised 3% COL. The original “3% COL promise” factored hugely into MY retirement decision in CY2012. Fortunately, the effort by OPERS to cut THAT particular COL benefit was not successful. My point and advice here is: make double-darn SURE you have an adequate financial “cushion” factored in before making any retirement decisions. That, my friends, should be the #1 reason folks are working longer. The “other” reasons, while very important as well, are simply secondary to adequate funding in retirement.

    Reply

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