The age of 62 is becoming an increasingly popular age for retirement. One of the reasons for this is obvious. It’s the earliest age at which Social Security beneficiaries can begin collecting payments. Most recipients leap at the opportunity to access those funds as soon as possible. As indicated by writer Maurie Blackman, this helps explain why 62 also represents the median retirement age for Americans.
According to a 2015 Transamerica Center Retirement Studies report, 91 percent of survey respondents chose to retire at 62. There was a time when 62 would have been considered old. But given today’s life expectancies, retiring at 62 may prove to be a bit premature for many. The Social Security Administration estimates that today the average 65-year-old man can expect to live past 84, and the average 65 -year-old woman can expect to live until nearly 87.
What this means is that if you are average and retire at 62, you are looking at a 22 to 25 year retirement. That represents a significant period that one will need to finance. The average Social Security beneficiary this year received a monthly payment of $1341.
Social Security benefits are designed to only replace about 40 percent of pre-retirement income, which means that the average person needs to finance the balance. For this reason among others, many advisors suggest that one choose one’s own retirement age with great care.