There are many statistics to consider regarding retirement, but age may become less relevant as more people continue to work past traditional retirement ages.
Some professions, including pilots, air traffic controllers, law enforcement officers, forest rangers, judges, and law partners, still have mandatory retirements, even though it is unconstitutional in most cases.
Age 65 no longer signifies much. According to Patrick Button, an associate professor of economics at Tulane University who studies age discrimination, 65 is becoming increasingly irrelevant to the average age of retirement. Buttons state that 65 is still a common age for people to retire, but it is becoming increasingly irrelevant as a meaningful age.
The retirement age debate arises as the United States is confronting a retirement crisis. Traditional pensions have all but vanished, leaving employees responsible for accumulating the majority of funds for retirement, and the future of Social Security is uncertain, even though Americans are living longer, necessitating more funds to finance those years.
For Americans born after 1960, the full retirement age, or the age at which full Social Security benefits can be claimed, has increased to 67.
Mandatory retirement ages are typically a poor policy, given that work capacity and interest in working differ greatly by age and individual. With improvements in health, lifespan, and healthcare, 65 is no longer the optimal retirement age. Button stated that older individuals desire to work longer because they have more work capacity, experience, and desire to work.
“In other cases, they simply cannot retire at 65 because they would be unable to make ends meet,” Button said.
The Social Security Act of 1935 established age 65 as the minimum eligibility age for full retirement benefits. However, the average male American’s life expectancy at that time was 59.9 years. When Social Security began, people didn’t live very long, and they didn’t have much quality of life. Based on current data from the CDC, U.S. life expectancy is 76.1% (79.1% for women and 73.2 for men).
The proposal by French President Emmanuel Macron to increase the age of retirement from 62 to 64, which prompted nationwide protests, was ultimately enacted into law this past Saturday. The United Kingdom and China may also raise their retirement ages in the future years.
Some legislators have proposed raising the full retirement age in the United States as a solution for the Social Security system. If nothing changes, the combined Social Security trust funds will run out in 2034, one year earlier than anticipated, with 80% of benefits still payable.
Regarding Social Security, raising the full retirement age may be a suitable solution for cubicle workers. However, manual laborers cannot physically last as long in these occupations. Consequently, raising the complete retirement age “disproportionately burdens the less affluent and those with physically demanding occupations.”
The mandatory retirement age is evolving.
Many chief executives and board members of corporations are still required to retire at age 65; Target, Caterpillar, and Boeing have recently modified their policies to allow CEOs to serve longer. When 71-year-old Bob Iger returned as Disney’s CEO, his age did not disqualify him. Moreover, at age 92, Warren Buffett continues to lead Berkshire Hathaway.
The average tenure of departing S&P 500 CEOs was 10.2 years, and their average age was 62.6, according to Spencer Stuart’s 2022 study. However, these people usually have money. It is the ones struggling to make a living that has to be concerned about the retirement age.