The Center for Retirement Research called the expectation of lower retirement ages “unsettling". Image: Rioji/Shutterstock.com
By: FEDweek StaffA study by the Federal Reserve Board shows a shift in peoples’ expectations about the age at which they will retire, potentially a sign of a change from the overall trend of recent years of expectations of ever-longer working careers.
The survey, conducted earlier this year by the New York Fed, found only 45.8 percent of some 1,300 persons expect to work beyond age 62, compared with an average of 49.4 percent over the prior four years.
“The decline is broad-based across age, education, and income groups, with workers under age 45, without a college degree, and with annual household incomes below $60,000 showing slightly larger declines than their peers,” it said. However, there was a difference by gender, with the decline greater among women than among men.
It said there was a similar pattern of declining expectations of working past age 67, with the drop again larger among women than among men—and also larger among households with incomes below $60,000.
“Given improvements in health and increases in life expectancy, this may be somewhat surprising. It is unclear what factors or combination of factors are driving this persistent decline: an increased preference of part-time over full-time employment; a cultural shift characterized by a rethinking of the value of work; a reflection of increased household net wealth; increased confidence about future growth in earnings and income and future financial health; a greater optimism about reaching retirement saving goals; or increased uncertainty about life expectancy post-pandemic,” it said.
The Center for Retirement Research called the findings “unsettling given that life expectancy is increasing for much of the population, and in recent years the percentage claiming Social Security benefits at 62 had been declining, and the average retirement age had been increasing.”
It asked: “Is this new sentiment a full-time versus part-time story? Do the responses reflect confidence due to higher net worth, more stable finances, and a stronger job market? Or does the shift, as the authors suggest, reflect a cultural change regarding the value of work? Or, given that study after study shows people consistently retire earlier than planned, are people simply becoming more realistic?”
Retirement Eligibility & FERS Minimum Retirement Age (MRA)
Retirement eligibility in the federal government adheres to certain age and years of service combinations.
Under the CSRS, CSRS Offset and FERS systems, it is the employee’s option to retire after reaching minimum age and service requirements. However, there is a difference in eligibility requirements between the CSRS/CSRS Offset and FERS systems.
Under CSRS/CSRS Offset, and employee may retire at age 62 with five years of service, 60 with 20, or 55 with 30.
Under FERS, an employee who meets one of the following age and service requirements is entitled to an immediate retirement benefit: age 62 with five years of service, 60 with 20, minimum retirement age (MRA) with 30 or MRA with 10 (but with reduced benefits).
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