Retirement & Financial Planning Report

Having a higher level of education is helpful in achieving a goal of extending a working career but is no guarantee since health factors that can compel a retirement earlier than expected apply regardless of educational levels, a report has said.

The Center for Retirement Research found that almost all of the increase in the average retirement age in the last three decades–up by about three years to 64.6 for men and 62.3 for women–is attributable to workers with higher educational levels. It found for example that the average for college-educated men increased from 64.9 in the 1980s to 65.7 today while the average age for males with only a high school education rose only slightly from 62.6 to 62.8.

Factors that have enabled longer working careers, including less physically demanding work, “appear to have had less impact on workers without a college degree,” it said.

It added that health “is one of the most important factors contributing to the retirement decision … it is the single most important factor in earlier-than-planned retirement, even more than involuntary job loss.

“Health matters in two ways. First, workers who experience a health shock are more likely to retire early. Second, workers who were in poor health when setting their retirement expectations also tend to retire earlier than they had planned, suggesting that unhealthy workers are often too optimistic about their ability to work longer,” it said.