Trend #1 Causing the Normal Retirement Age to Change — The Realities that Made Age 65 the Norm are Fading from Memory
Age 65 was established as the normal retirement age as a result of the Social Security legislation of the 1930s. The idea was to get old workers out of the workforce, open up room for the hiring of younger workers, and thereby get the economy on its feet again.
The economic realities have changed over the past 70 years. The factors that made identifying age 65 as the normal retirement age make sense no longer apply. It’s just a matter of time before new norms are established.
Trend #2 Causing the Normal Retirement Age to Change — Employers Are Getting Out of the Retirement Security Business
Our employers did not finance our retirements with company pensions because they liked our smiles. They did it because they needed to entice workers from farms into factories and from factories into offices. They don’t need to do that anymore.
For a time it was shocking for an employer to announce that it was going to stop funding its employees’ retirements. More and more employers have gone down this path in recent years, making it easier for even more to follow suit. It’s unlikely that employers will want to reassume this financial burden. Company-paid pensions are on the way out.
Trend #3 Causing the Normal Retirement Age to Change — Workers Are Not Saving Enough to Be Able to Retire at Age 65
Most workers have not saved enough to be able to retire by age 65. New products and services are made available to us all the time and many of these products and services offer strong value propositions. Given the weaknesses of the conventional money management model, workers naturally are enticed to spend most of their incomes. The end result is that many will not be able to retire at age 65.
Trend #4 Causing the Normal Retirement Age to Change — Most Workers Overestimate Their Net Worth
Most of today’s workers are heavily invested in heavily overvalued stocks. That means that most of today’s workers are overestimating their net worth. Even many of those who believe today that they will be able to retire at age 65 will find that they are no longer able to once stock prices drop dramatically.
Trend #5 Causing the Normal Retirement Age to Change — Multiple-Employer Careers Are Becoming Common
It used to be common for employees to remain at a single employer for an entire career. This is less and less the case. This makes planning more difficult and more fluid.
Changing employers can cause big income increases or big income drops. Some workers will be left better able to retire early. Others will be less able to retire at the normal retirement age.
Trend #6 Causing the Normal Retirement Age to Change — Fulfillment Counts for More to Today’s Workers
Workers who lived through the Depression cared most about income, benefits and job security. Today’s worker seeks personal fulfillment in his or her job. Many of today’s workers have small families or have no children or are unmarried. Such workers put more focus on obtaining fulfillment at their work. Such workers are less inclined to be willing to give up the spiritual rewards of work at age 65.
Trend #7 Causing the Normal Retirement Age to Change — Workers are Living Longer
Age 65 was established as the normal retirement age at a time when those who had reached age 65 were old. Many of today’s 65-year-olds have a good number of energetic years ahead of them. They are not inclined to accept without question the normal retirement age.
Trend #8 Causing the Normal Retirement Age to Change — Work Today is More Fun
We all complain from time to time about the work we do. Truth be told, however, many of us derive a secret pleasure from our jobs. Few of us are coal miners anymore. Work today is more enjoyable than was work in the days when age 65 was established as the retirement norm.
Many of us are disinclined to give up our share of the fun. We want to move to less stressful jobs. We want to move to jobs that leave us with more free time. We want to move to jobs that we find more meaningful. We don’t want to leave the workforce altogether just because we happen to turn 65.
Trend #9 Causing the Normal Retirement Age to Change — Workplace Rules are Becoming More Fluid
Computers permit much work to be done offsite. Employers are better able to check on whether work is being done properly by employees not coming in to the office or not even living in the same state. Workers who are older than 65 are open to all sorts of arrangements that those in need of larger incomes to finance mortgage payments and college tuition payments are not willing to consider. Employers and older workers possess both the motivation and the means to construct creative arrangements for the older workers to continue working in some capacity beyond the normal retirement age.
Trend #10 Causing the Normal Retirement Age to Change — Workers Earn More
Most of us earn more than did our parents or grandparents. While many workers will elect to work past age 65, others will elect to retire earlier than the normal retirement age. Both changes erode belief in the idea that there is signifiance to the act of turning 65. In a culture in which we are offered 12 different ways to drink our cola and 36 different toppings for our pizza, the one-size-fits-all retirement no longer seems to make much sense.
The passing of the normal retirement age is a frightening specter to many. For good reason. Most of us have devoted little time to planning our careers or our financial affairs. Still, the news is not all bad. Those who do plan have before them more opportunities than were available to workers of any earlier time. Today you can choose your retirement age just as you can choose your pizza toppings or your cola.
Retirement — Have It Your Way!