Why Do People Retire At 62?

Even though there are a number of financial and emotional reasons to think that putting off retirement might be the wisest course, the average retirement age in the United States is 63.

While rational reasons why a person might want to retire at an early age, perhaps health or personal assumptions about life expectancy, those are not the case for most people. In this day and age, people are reaching their sixties still quite fit in mind and body. There is no real reason for most people to physically retire in their early sixties, and given that social security gives a “raise” for every year retirement is postponed, good reason not to.

Why then do the majority of Americans retire before the age of 65? One reason is because they can.

We like to think that decisions regarding retirement are made on a rational basis, but the truth is that often they are not. We as human beings have a natural tendency to value current options over future ones. In other words, being able to retire today outweighs the value of having a more affluent retirement five years from now.

This type of thinking is obvious in the retirement choices people make all through their lives. It is reflected in the dismal statistics regarding how much the average person nearing retirement has saved.

Forgoing a little bit of income when you are young in return for an abundant lifestyle when you are older is a no-brainer. If young people are asked whether that is a good idea they would overwhelmingly say yes. But when it comes to actually doing it, the idea of saving 6% or 10% of their income comes up against the consumer society. Saving has to compete with a new car, a bigger house, finer clothes or a trip to Europe. Retirement decisions can be put off until tomorrow, purchasing decisions are made today.

The same emotional response applies when retirement looms. Today you might be thinking that of course you will put off retiring, certainly until at least your age of full retirement, which is now in the neighborhood of 66 years. But will you be able to hold your resolve when the social security administration informs you that you can start receiving benefits? And even if you can avoid taking that bait the first year, how about the next year, or the next?

On those days when the wear and tear of having worked for forty years or more drags on you and the idea that instead of the alarm clock jerking out of bed in the morning for another day of drudgery at the job you no longer even like wars against the idea of hitting the snooze and opting for breakfast on the veranda, will you be able to hold your resolve? Should you?

That depends on questions that only you can answer

There is no right or wrong decision, but you should give it some thought ahead of time. If the urge to pack it all in comes at a time that you know is wrong for you, you should be able make the decision with your head instead of by the lure of that breakfast on the veranda.

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