What age do most people stop working?

Retirement is a major life transition that most people go through at some point. Choosing when to retire is an important personal decision that depends on many factors like financial readiness, health, career satisfaction, and life goals.

Table of Contents

When is Typical Retirement Age?

The most common retirement age in the United States is between 62 and 67. This is largely driven by eligibility ages for Social Security and Medicare benefits:

Age 62 – Early eligibility for Social Security retirement benefits begins at age 62.
Age 65 – Medicare eligibility begins at age 65.
Age 66-67 – Full retirement age for unreduced Social Security benefits is currently 66 for those born 1943-1954, and gradually increases to 67 for those born in 1960 or later.

According to a 2021 Gallup poll, the average retirement age in the U.S. is 66. This has steadily increased over the decades, up from age 60 in the 1990s.

However, retirement can happen both before and after this typical 62-67 age window for a number of reasons.

Early Retirement

Some people choose to retire early, before age 62. The most common reasons include:

Financial ability – Having adequate savings and sources of retirement income to support an early retirement lifestyle.
Career dissatisfaction – Being unhappy or burned out in one’s career and ready for a change.
Health problems – Chronic illness or disabilities that make working difficult.

Change of priorities – Wanting more freedom and time for family, hobbies, travel, etc.

According to the Employee Benefit Research Institute’s 2021 survey, 30% of retirees left the workforce before age 60. However, early retirement is possible for a minority of people who have substantial retirement savings or pensions.

Later Retirement

On the other hand, a significant number of people work past the typical retirement ages. Some key reasons include:

Financial reasons – Insufficient retirement savings and income to maintain their lifestyle. The rising cost of living longer worsens this.
Lack of access to retirement plans – Especially an issue for small business, part-time, freelance, and gig economy workers who lack employer-sponsored 401(k)s and pensions.
Need for health insurance – Delaying retirement to keep employer-provided health insurance, especially before Medicare eligibility.

Longer life expectancies – People are living and staying healthy longer, enabling more active later life work.
Enjoying work – Many remain engaged in rewarding careers they find purpose in continuing.

According to the Bureau of Labor Statistics, workforce participation after age 65 has risen substantially in recent decades. 16% of people 65+ remained employed in 2020, up from just 10% in 1985.

Retirement Ages for Different Demographics

Retirement patterns vary significantly based on demographics like gender, education, health, and career type. Here is a comparison of how retirement age correlates with different factors:

Group	Average Retirement Age
Men	64
Women	62
High school education	62
College degree	66
Government workers	60
Private company workers	64
Self-employed	68
Good to excellent health	65
Poor to fair health	63

Key observations:

Women tend to retire about 2 years earlier than men on average.

Those with college degrees retire several years later than high school graduates.
Government workers have earlier retirement ages due to pension eligibility.
Self-employed people retire much later, as their income depends on working.

Poor health correlates with earlier average retirement.

How Many Years Do People Spend in Retirement?

With people generally retiring in their early to mid 60s, but life expectancies now stretching well into the 80s, retirements can last 20 years or more. According to the Social Security Administration:

A man reaching age 65 today can expect to live, on average, until age 84.

A woman turning age 65 today can expect to live, on average, until age 86.

So once in retirement, people can expect 15-20 more years of life on average. However, this varies significantly based on health and family longevity history. For example, roughly 1 out of 4 people age 65 today will live past age 90 according to actuarial projections.

Changes in Life Expectancy Over Time

Back in 1960, a 65 year old could only expect to live another 14 years or so on average. Retirements only lasted 10-15 years typically. But life spans have lengthened considerably thanks to medical advances and improved public health over the decades. This duration of supported retirement years has major financial implications for individuals and government benefit programs.

How Do People Spend Their Retirement Years?

The lifestyle of retirement varies greatly for different people depending on interests, health, income levels, and other factors. Some popular retirement activities include:

More time with family – Especially grandchildren and aging parents.
Travel – Ramping up vacations with free time. Retirees report an average of 5-6 leisure trips per year.

Hobbies – Developing passions like gardening, golf, arts and crafts, photography.
Learning – Taking educational courses out of personal enrichment rather than career advancement.
Exercise – Focusing more on fitness like joining gyms or fitness classes.

Part-time work – Phasing into retirement with bridge jobs or side gigs.
Volunteering – Donating time to causes in the community.

Staying active, both physically and mentally, and nurturing a sense of purpose are important for health and life satisfaction in retirement. Older Americans report that retirement has had a very positive impact on their quality of life overall, especially if they retired voluntarily when ready.

How Does Retirement Impact Health and Longevity?

The transition to retirement can have mixed effects on physical health and longevity. For some people, retirement provides:

Reduced stress by leaving behind workplace demands and pressures.
More time for healthy behaviors like exercising, cooking nutritious meals, and visiting doctors.

The lifting of physical job strains on the body over decades.

However, for others retirement may:

Increase risk of inactivity, weight gain, and related chronic illnesses.

Lead to increased drinking and smoking habits.
Contribute to isolation and depression from reduced social connections.

Overall, studies find limited evidence that retirement directly causes improved or declined health. Lifestyle choices and changes after retirement may matter more. Retiring when ready and maintaining an active, engaged lifestyle are linked to longevity benefits according to research.

Financial Preparations for Retirement

Retiring at the desired age requires careful financial planning many years in advance. Major considerations for funding 20 or more years in retirement include:

Social Security benefits – Full retirement age must be weighed against taking reduced benefits as early as age 62.
Defined contribution plans – 401(k) balances and IRAs need to be of adequate size, and withdrawals paced to last.

Defined benefit pensions – For the minority still covered by employer pensions, monthly payments provide an income stream.
Savings and investments – Interest, dividends, rentals, and selling assets can supplement other income sources.
Working income – Earnings from part-time work, self-employment, or business ownership.

Insurance – Long-term care and life insurance can offset late life costs.
Reduced spending – Downsizing housing, budgeting, and changing lifestyles to cut retirement costs.

People should target replacing at least 70-80% of their pre-retirement income to maintain living standards. Retiring early makes reliable income streams and bigger savings balances essential.

Staying Employed in Older Age

Many people choose to continue working beyond when they start receiving Social Security and pension benefits. Surveys show about 80% of retirees say they worked longer than planned due to inadequate savings. But others simply have fulfilling jobs they enjoy and want to continue.

Typical ways of staying employed later in life include:

Contingent work – Consulting, freelancing, temporary gigs.

Part-time schedules – Phasing into retirement by cutting back hours.
Starting a small business – Turning a hobby into an income source.
Returning to old employers – Short-term projects, seasonal peaks.

Working not only provides income, it can support continued mental and social engagement. With longer modern life spans, multi-stage retirement careers are becoming more common.

Challenges of Working at Older Ages

Remaining employed or rejoining the workforce after retiring comes with some challenges including:

Physical stamina and job demands if health is declining.

Age discrimination from employers favoring younger workers.
Technology skills falling behind younger workers.
Balancing flexible work with retirement plans and travel.

Loss of access to some pension payments if salary exceeds limits.
High implicit taxes on Social Security benefits if income is too high.

Older workers may need to adapt to changing career options, part-time hours, and lower pay. But continuing meaningful engagement with society through work can have mental and physical health benefits.

Reasons People Return to Work After Retirement

Up to 40% of retirees end up going back to work on at least a part-time basis. Reasons include:

Insufficient income from Social Security and savings.
Boredom and lack of purpose in full retirement.

Missing social connections of work.
Needing supplemental funds after a major home or health expense.
Spouse generating retirement income was lost.

Part-time work flexibility better supports travel or other goals.

Some returnees take jobs similar to their careers, while others embark on encore careers doing something new they find meaningful. Working in retirement years does not necessarily mean failure. It can support active engagement and lifestyle goals when approached strategically.

How Do Retirees Feel About Their Choice?

The transition to full retirement is a major and often bittersweet life change. In surveys, retirees commonly report feeling:

Happier and more relaxed – Without workplace pressures and stress.
Bored or purposeless at times – With an unstructured routine needing filling.
Lonelier – With fewer social interactions and connections.

Financial anxiety – Over having enough savings and income last.
Uncertainty about identity – With work being such a major lifetime focus.
Worried about cognitive decline – With less mental stimulation.

But the majority of retirees (around 80%) report being satisfied with their decision to retire and find this new life stage rewarding overall. Retiring on one’s own timeline when financially and emotionally ready is key to optimizing the experience.

Best Practices for a Fulfilling Retirement

While the ideal retirement age depends on individual circumstances, certain practices are linked to more satisfying and healthy retirements:

Retiring close to the planned timeline, rather than being forced into it sooner.

Building up robust financial savings before retiring.
Remaining physically active with exercise several times a week.
Staying socially and mentally engaged through hobbies, volunteering, or part-time work.

Developing a purposeful but flexible daily routine.
Maintaining health insurance coverage like Medicare.
Staying involved with family and long-time friends.

Preparing for retirement is key, but how you spend your time and find meaning after leaving work matters just as much for truly thriving in your later years.

Conclusion

Deciding when to retire depends greatly on individual circumstances. While the most common retirement age falls between 62 and 67, many people retire both sooner and later than this timeframe. Early retirement is possible for those able to build sufficient savings and income streams. But plenty of people also work well into their 70s and 80s by choice or necessity as well. Retiring at the right time for your situation – when you’re financially ready and eager for a lifestyle change – is key to optimizing the chances of an enjoyable and purposeful retirement.