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FINANCIAL FORUM: Retire at 65! A myth?


Why has 65 become the age everyone points to as a normal retirement age? Age 65 became the norm due to Social Security and traditional company pension plans establishing that as the age for full retirement benefits. This goes back over 75 years ago.

The way these plans were established, it created a disincentive to work. Therefore, most people opted to retire then. It seemed a logical response.

We are in the midst of a time when baby boomers are retiring at the pace of 10,000 per day. They have grown up with the age 65 mindset. If you retire before 65, then “you are retiring early”. If you wait to retire after age 65, then “you are retiring late.” It is the expected standard in many minds. Many company policies use age 65 as the threshold for certain post-retirement benefits.

Those times have changed and are continuing to change. I recently watched a football game where the head coach was 77 and indicated he plans to be back next year. Look all around and you find many people in their 70s continuing active employment. I love the quote from George Burns who was in his 90s at the time he said, “retirement at 65 is ridiculous. When I was 65 I still had pimples!”

Company pension plans continue to be replaced by 401(k) and similar plans. Social Security has increased the retirement age for full-benefits and likely will raise the age again in the future.

The truth is retirement begins when you’re ready and can afford it, or when health issues force you no longer being able to work. Some people retire in their 30s and 40s, and some people never retire. The age 65 standard for retirement is a myth. You can retire or not retire at any age.

A primary driver for many is whether they can afford to retire. The earlier you begin retirement planning and saving, the more flexible and free you’ll be to make the right choice that’s fulfilling for you. It’s gratifying to have worked with some ministers who took serious saving for retirement when they were young. Now they are retired and doing missions and volunteer work because they can afford to. Others could, but choose to continue to work because they find fulfillment in their work. They are working because they want to, not because they have to.

Don Spencer is the church financial benefits consultant for the Kentucky Baptist Convention.

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