A Plan For Non-Retirement

By Steve Tepper, CFP®, MBA


One of our favorite statistics here is the average retirement age in the United States, which has been 62 since about the time the federal government began allowing people to take Social Security retirement benefits early. We love this statistic even more when it is combined with another statistic: When a couple reaches the age of 62, the actuarial tables say one of them will live to age 92.

That means if a couple retires at age 62, they have to plan for a 30-year retirement. And what makes the math really fun is they only had about 40 years to save enough for that 30-year retirement, and during that 40 years, they probably had to spend some of that money they made on stuff like, you know, food and housing.

The math is daunting, but a new trend seems to suggest that the “retirement age” generation has found a way to deal with it: By not retiring.

According to an article in Financial Advisor magazine, 32% of Americans between 65 and 69 are still working.[1] That’s a big jump from 22% in 1994. Even after age 70, a growing number of seniors are working: 19% of 70- to 74-year-olds, up from 11% in 1994.

Those statistics represent the highest employment rate for seniors since 1962 (a year after the early retirement benefit age of 62 was established).

With all those older Americans working, it’s hard to believe that the average retirement age is still 62. And that’s because it isn’t anymore. It has notched up to 63, according to an article on www.thebalance.com.[2]

Many factors contribute to the delayed-retirement trend, including older Americans’ expectations of living longer (and being healthier) than previous generations. And believe it or not, some people actually enjoy their jobs.

But it’s hard to argue with the hard-dollar justification. Working past the average retirement age reduces the specter of superannuation (outliving your money) a double whammy. Every year you work is one more year contributing to your nest egg and one less year drawing from it.

Working at least until age 65 takes another large potential cost off the table—medical insurance. If you retire before then in good health, you probably won’t qualify for Medicare benefits, which means you’ll need other medical insurance coverage until age 65.

Have you looked up private insurance quotes lately? For a 62-year-old male, nonsmoker in good health, the monthly premium is approximately one arm and one leg. Suddenly, staying on with your employer has the added value of keeping you on a subsidized group plan through your employer. That could save you tens of thousands of dollars over just two or three years.

The prospect of retiring comfortably and staying comfortably retired[3] is fraught with peril but achievable with proper planning. And that’s what Northstar is here for!

1. Steverman, B. (2017, July 10). Working Past 70: Americans Can’t Seem to Retire, from www.fa-mag.com/news/working-past-70--americans-can-t-seem-to-retire
2. Anspach, D. (2017, March, 16) Average Retirement Age In The United States, from https://www.thebalance.com/average-retirement-age-in-the-united-states 
3. Quote from Nick Murray

Past performance is no guarantee of future results. There is no guarantee an investment strategy will be successful. Diversification does not eliminate the risk of market loss. Investing risks include loss of principal and fluctuating value. International investing involves special risks such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks.