What Is Retirement Age in the US?

The average age of retirement in the US is 64.6 for men and 62.3 for women, a number that has increased over the last few decades, according to the Center for Retirement Research at Boston College [1]. The “right time” to retire varies based on your career, health insurance, marital status, and individual preference. For example, if you have health insurance through your job, and are not yet 65, the age you can sign up for Medicare [2], you may decide to retire based on health insurance.

The Social Security Administration (SSA) has different terms, tiers, and ages determining your social security benefits. Your benefits are, first and foremost, dictated by your “full retirement age,” which is the age at which you can collect unreduced benefits. 

Learn more about full retirement age, early retirement considerations, retirement planning, and how to work after your full retirement age to maximize your social security benefits. 

What does it mean to be at full retirement age?

At full retirement age—or the age the SSA has deemed “normal” to retire—you can retire from work and receive your unreduced social security benefits. Social security benefits become reduced if you retire before this age. In the past, the full retirement age was 65 years old, but in 1983, US Congress passed a law to gradually raise the retirement age, citing the rise in life expectancy [3]. 

This gradual rise in retirement age means that if you were 62 or older and retired today, your benefits will vary depending on the year you were born. The SSA has a table and a calculator on its website that you can use to determine your social security benefits [3]. Its table has been reproduced below [4]: 

The full retirement age in the US is currently capped at 67. As of July 2024, if you were born in 1960, you would be turning 64 in 2024, meaning you would not be at your full retirement age until 2027 [4]. 

What to consider before retirement

While it might seem obvious to wait until you are at full retirement age before you retire so that you can enjoy the full benefits, it’s worth considering several advantages and disadvantages associated with that decision. 

The SSA recommends considering these factors before you retire:

• Do you still work?

• What is your life expectancy?

• Will you still have health insurance?

• What is your spouse and family situation?

• What is your current financial situation?

Work

Retirement does not mean you need to stop working; it just means you will receive social security benefits on behalf of the SSA for your life of labor. In fact, working after declaring retirement can increase your monthly benefits if your most recent year of earnings is one of your highest. It is important to know the income caps that may reduce your benefits depending on whether you have retired at or before your full retirement age. 

For instance, if you have retired before your full retirement age in 2024, your annual earning cap is $22,320, and the SSA will deduct $1 from your benefits for every $2 above the earning cap. If you retire at your full retirement age in 2024, your annual earning cap is $59,520, and the SSA will deduct $1 for every $3 above the earning cap [5].

The SSA only includes wages, bonuses, commissions, and vacation pay when calculating your social security deductions due to income after retirement. It does not include pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.

Life expectancy

The average life expectancy in the US as of 2021 is 76.1 years, a decrease from recent years [6]. The SSA recommends that you consider your lifestyle and family history when deciding at what age to retire. If you expect to live longer, you will need benefits to last longer if things like pensions are limited. 

Health insurance

If you retire before your full retirement age and before age 65, when you can sign up for Medicare, you will still need to pay for private health insurance from a provider or the Affordable Care Act Marketplace. This may dictate your decision to continue working if you receive health insurance benefits from your employer. 

Some employers continue health insurance benefits in their retirement packages, and it is important to check if your employer has those benefits. If your spouse is still employed, you may be able to stay on their health insurance from their employer. Many employer health insurance plans will automatically have you enroll for Medicare when you turn 65. 

Family

Your family and marital status can factor into your decision to retire, as members of your family may be able to receive benefits on your behalf. Additionally, if you are a widow, widower, or surviving divorced spouse, you can delay your retirement and instead opt to apply for survivor benefits. 

If you are eligible to receive a spouse’s or divorced spouse’s social security benefits, you may be able to delay your own, even if you are at full retirement age, to receive delayed retirement credits. Under certain circumstances, your children can also receive benefits. As determined by the SSA, the child must be unmarried, under the age of 18, or 18 to 19 years old, and a full-time student no higher than high school. Children can also be 18 or older if they are disabled, and that disability started before they turned 22 [7].

Work with your spouse and other family members to maximize your social security benefits. 

Financial situation

The impact of your financial decision depends on all of the other factors. For example, if your retirement benefits from your employer cover your savings and health care, it may be beneficial to wait to receive your benefits so that you receive more money monthly than if you decided to retire before your full retirement age. Or you could decide to receive your benefits early and use the extra money to invest for even longer-term returns if you do not need to live off of your social security benefits.

Retirement at full retirement age vs. retirement before full retirement age

Many factors can inform your decision on when to retire. Take a look at some pros and cons of retiring at full retirement age versus retiring before full retirement age. 

Retirement at full retirement age

Retirement at full retirement age is the age when you can receive your unreduced amount of social security benefits. Below is a list of pros and cons you may want to consider before retiring at full retirement age.

Retirement before full retirement age

You become eligible for social security benefits starting at 62 years of age; however, at this age, you’d receive reduced benefits. The reductions are in percentages that increase based on how many months you are from full retirement. You can find the reduction percentages on the SSA website. The current maximum reduction if you retire at 62 and if you were born in 1960 or later is 30 percent [8]. While receiving reduced benefits might seem negative on the surface, it does have some pros. 

Whether you retire early or at full retirement age, you’ll find pros and cons. For some people, working longer to receive full benefits may be too burdensome, so taking the benefits early is a more desirable route. You may want to stop working so you can travel, spend time with family and friends, volunteer, or even start a new business venture.  

However, waiting might be best for a person who still feels fulfilled by their work and wants to receive the maximum amount of benefits. Either way, consider the various factors when deciding when to receive social security benefits. 

Working after you become eligible for benefits

A third way to approach retirement and social security benefits involves delaying retirement. If you are content with your current career or job or are stable financially, you will be able to delay retirement. Delaying retirement after you reach your full retirement age means that you will receive delayed retirement credits until you reach the age of 70. 

Delayed retirement credits

Delayed retirement credits are percentage increases to your social security benefits. These increases are incremental and increase monthly. Currently, if you were born in 1943 or later, you would receive an increase of two-thirds of 1 percent monthly or 8.0 percent annually [9]. Using the SSA retirement calculator, if you were born June 30, 1960, and delayed retirement until age 70, your benefits would increase to 124 percent of their normal amount because you delayed social security benefits for three years [10]. 

Taking a delayed retirement means an increase in social security benefits; however, you would receive benefits for a shorter period of time than if you took an early retirement or retired at your full retirement age. It is still important to enroll in Medicare at age 65, as delaying may be more costly. 

Next steps

The age that you choose to retire is entirely your decision, and “the right time” varies from person to person. When deciding what age to retire, consider your current family situation, financial needs, and health to determine the right priorities for you. You can find advantages and disadvantages to retiring before you reach “retirement age,” and carefully considering each can help you decide which advantages outweigh the disadvantages. Regardless, you have been in the workforce for most of your life and deserve to rest and relax. 

If you are not at retirement age and are looking for a career, Coursera offers many paths to follow. If you are retiring soon or are already retired, research at the University of Michigan shows that exercising your brain has many health benefits [11]. If you want to get back into learning, try Learning How to Learn offered by Deep Teaching Solutions on Coursera.