The average retirement age in the United States is 63 years old, but that does not necessarily mean that everyone is retiring with a sufficient amount of income. The ideal retirement program starts the moment a person starts working and grows throughout their working life. But many people either avoid retirement planning until later in their lives, or they neglect to plan at all and rely on the social security program. Considering all of the retirement incomes that are in effect, it is surprising to find out what the average income is for all retired Americans.
Recent Retirement Trends
In recent years, it is estimated that more people are taking retirement planning seriously and are putting aside more money for their golden years. From 2013 to 2017, the percentage of retired people who will be able to afford the basic necessities of life jumped from 38 to 45 percent. It is encouraging that nearly half of the population will be able to successfully retire, but the fact that the other half is ill-prepared is a concern.
Not Taking Advantage Of Social Security
As of 2018, the full retirement age (FRA) for workers in the United States is 67 years old. This means that, in order to collect full social security benefits, a person has to wait until they are 67 years old to start collecting. But the social security system allows people to start collecting a partial monthly amount at age 62, and nearly half of all men and women take the 62 year old option. This lowers the average monthly social security retirement benefit paid to $1,298.98 per month. For many retirees, this represents 33 percent of their total retirement income.
The Average Retirement Income In The United States
The average retirement income in the United States for people age 65 and old is $31,742.00 per year. While this number is in line with the average income for working Americans, nearly 30 percent of all retirees still count on their savings to be able to pay their bills.
Challenges To Retirement
There are several challenges that retirees must face when it comes to their income. For one thing, the value of their retirement income decreases as the cost of living continues to rise. Most retirees are not involved in a retirement program that has a cost of living increase. Another issue for retirees is the rising cost of health care and health insurance. Health costs go up every year, but retirement incomes are unable to keep pace.
While many people are able to retire with an income that allows them to survive, their ability to pay their bills decreases as the cost of living increases. As retirees get older, their ability to get back into the workforce to supplement their retirement decreases, making their situations that much worse. This is one reason why many retirees are starting their own businesses or taking on part-time employment at a time when they should be enjoying the fruits of their years of hard work.