Retirement Age

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on July 11, 2023

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What Is Retirement Age?

Retirement age is the age at which an individual stops working and begins to receive financial support from their pension, savings, or social security benefits.

Factors influencing retirement age can range from personal preferences to financial circumstances and overall health. Retirement planning is crucial for ensuring a comfortable and fulfilling life after leaving the workforce.

Retirement Age Around the World

Comparison of Retirement Ages by Country

Retirement ages vary significantly across different countries. For instance, in the United States, the current retirement age is 66 for full social security benefits, while in Australia, the age pension eligibility age is 65-67.

The retirement age can be influenced by various factors, including demographics, cultural values, and economic conditions.

Trends in Retirement Age Adjustments

Many countries have adjusted their retirement ages in recent years, primarily due to increases in life expectancy and concerns about the sustainability of pension systems.

For example, some European countries have gradually increased their retirement ages to reduce the financial burden on pension systems.

Impact of Cultural and Economic Factors on Retirement Age

Cultural and economic factors play a significant role in determining retirement age. In some countries, it is common for people to continue working past the official retirement age due to strong work ethics or financial necessity.

In contrast, in other nations, early retirement may be encouraged to make way for younger generations in the workforce.

Factors Affecting Retirement Age Decisions


Financial Considerations

Pensions and Retirement Savings

A crucial factor influencing retirement age is an individual's financial security. Pensions and retirement savings, such as 401(k) plans and individual retirement accounts (IRAs), can significantly impact when a person decides to retire.

Social Security Benefits

Social security benefits often play a vital role in determining retirement age. The age at which a person can receive full social security benefits varies across countries and may influence when an individual chooses to retire.

Cost of Living

The cost of living in retirement is another significant factor. Individuals must consider their anticipated expenses, such as housing, utilities, and healthcare when determining their retirement age.

Health and Well-Being

Physical Health

Physical health can significantly impact retirement age decisions. Individuals with poor health or chronic medical conditions may need to retire earlier than planned.

Mental Health

Mental health is another crucial factor in determining retirement age. Prolonged work-related stress can lead to burnout or other mental health issues, prompting some individuals to retire early.

Life Expectancy

Increases in life expectancy have influenced retirement age decisions, as individuals may need to work longer to ensure financial security throughout their retirement years.

Personal Preferences and Lifestyle

Desire to Continue Working

Some individuals may choose to work beyond the traditional retirement age because they enjoy their careers or feel a sense of purpose in continuing to contribute to their professions.

Hobbies and Interests

Retirement can offer an opportunity for individuals to pursue hobbies and interests that they may not have had time for while working. Personal interests may influence an individual's decision to retire early or continue working.

Family and Social Considerations

Family and social connections can also play a role in retirement age decisions. Retiring early may provide more time to spend with loved ones or to care for aging family members.

Pros and Cons of Early Retirement


More Leisure Time

Early retirement allows individuals more leisure time to pursue hobbies, travel, or spend time with family and friends.

Reduced Work-Related Stress

Retiring early can reduce work-related stress and the potential for burnout.

Pursuit of Personal Interests

Early retirement provides individuals the opportunity to focus on personal interests and passions, leading to a more fulfilling and enjoyable retirement experience.


Financial Constraints

Early retirement may result in reduced financial resources, as individuals have less time to accumulate savings and may receive lower social security or pension benefits.

Potential Loss of Social Connections

Leaving the workforce earlier than anticipated can lead to a loss of social connections, as individuals may have fewer opportunities to interact with colleagues or professional networks.

Possible Decline in Cognitive Abilities

Research has shown that staying engaged in mentally stimulating activities, such as work, can help maintain cognitive abilities. Early retirement may lead to a decline in cognitive function due to reduced mental engagement.

Pros and Cons of Delayed Retirement


Increased Financial Security

Working beyond the traditional retirement age can result in increased financial security, as individuals have more time to save for retirement and may receive higher social security or pension benefits.

Continued Social Engagement

Delayed retirement can help maintain social connections and provide opportunities for continued engagement with colleagues and professional networks.

Sense of Purpose and Accomplishment

Working longer can provide a sense of purpose and accomplishment as individuals continue to contribute to their professions and achieve career milestones.


Potential Burnout

Delaying retirement may result in burnout or work-related stress, particularly for individuals in high-pressure or physically demanding careers.

Health Concerns Related to Prolonged Work

Continuing to work beyond the traditional retirement age may exacerbate health concerns or lead to new health issues due to the physical and mental demands of the workplace.

Limited Time for Leisure and Personal Interests

Delayed retirement may result in less time for leisure activities, personal interests, and spending time with loved ones.


Planning for Retirement

Assessing Personal Goals and Needs

Individuals should begin by evaluating their personal goals and needs, such as desired lifestyle, travel plans, and potential healthcare costs, to determine their optimal retirement age.

Developing a Financial Plan

Retirement Savings and Investment Strategies

Creating a financial plan is essential for ensuring a comfortable retirement. Individuals should consider their retirement savings and investment strategies, including contributions to retirement accounts and diversification of investments.

Budgeting for Retirement Expenses

A detailed budget can help individuals anticipate retirement expenses and adjust their savings goals accordingly. This budget should account for housing, utilities, healthcare, and other anticipated costs.

Managing Healthcare Costs

Healthcare costs can significantly impact retirement planning. Individuals should research and plan for potential healthcare expenses, such as long-term care, prescription medications, and supplemental insurance coverage.

Preparing for Lifestyle Changes

Developing New Hobbies and Interests

Retirement offers an opportunity to explore new hobbies and interests. Individuals should consider engaging in activities that promote mental, physical, and emotional well-being.

Strengthening Social Networks

Maintaining strong social connections is crucial during retirement. Individuals should cultivate friendships and relationships with family members, join clubs or organizations, or volunteer in their communities to stay socially engaged.

Considering Relocation or Downsizing

Some individuals may choose to relocate or downsize during retirement to reduce expenses, be closer to family, or enjoy a different climate or lifestyle. Careful consideration should be given to the financial and emotional implications of such a decision.


Determining the optimal retirement age is a multifaceted decision that depends on a variety of factors, such as financial security, health, and personal preferences.

With retirement ages varying across different countries, it is essential to consider the specific context when making retirement decisions.

Early retirement offers benefits such as more leisure time and reduced stress, while delayed retirement can provide increased financial security and continued social engagement.

Proper planning, which includes assessing personal goals, developing a financial plan, and preparing for lifestyle changes, is crucial for ensuring a comfortable and fulfilling retirement experience.

As the global population continues to age and pension systems face sustainability challenges, understanding the various factors influencing retirement age decisions remains a pertinent topic for individuals and policymakers alike.

Retirement Age FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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