Many workers in the United States often look forward to retiring, but there isn’t a direct consensus on the best retirement age. While it’s possible to retire at the age of 62 to claim Social Security benefits, you won’t be able to receive your total amount until you are either 66 or 67 years old. You can even wait until 70 years to retire if you want an 8% increase in your per-year benefits over your full retirement age.
Social Security Full Retirement Age
Recently, the House of Representatives approved a retirement bill focused on increasing the age of required minimum distributions for specific savings accounts for anyone 75 years old, which is an increase from the current requirement of being 72 years of age. If this gets approved in the Senate, the bill will gradually be implemented by 2032. This proposal will most likely impact increasing other official ages for government programs and tax codes.
Lawmakers also need to continue to find ways to fund Social Security, as it’s projected that these funds will be nearly depleted by 2034 if no changes happen. Raising payroll taxes, increasing the full retirement age, and raising taxes on benefits are just a few of the many different options. The last time retirement ages were modified was 1983 under President Ronald Reagan. Those changes increased the full retirement age to 67 instead of 65. Many in the retirement planning industry feel that future changes could further increase the retirement age for Social Security.
It’s also possible for lawmakers to increase the initial age for eligible retirement benefits from 62 while also increasing the highest age for delaying these benefits, which is currently at 70 years. Making plans for possible benefit reductions is essential if you are between 45 to 60 years of age due to the potential changes to the Social Security retirement age chart. Making sure all of your bases are covered is essential in helping you navigate these changes with a minimal amount of disruptions to your lifestyle.
Decline Life Expectancy in the USA
Life expectancy in the US fell dramatically compared to other high-income countries in 2020. The only other country to experience an even more significant decline in life expectancy was Russia. The study looked at premature death rates in 37 countries, as the life expectancy decreased in 31 of these countries during the pandemic. The decline in life expectancy for US men was especially bad, as it fell by almost 2.3 years (76.7 to 74.4), while women lost over 1.6 years of life expectancy (81.8 to 80.2). This study provides one of the most detailed views of the cost of the pandemic and how it impacted different ages and genders.
One of the biggest surprises in life expectancy in the US was the death of younger people. The drop in life expectancy for younger people hasn’t been seen since World War II. Disease wasn’t the only factor in the declining life expectancy in the US, as drug overdose deaths and homicides were also on the rise in 2020. Overall, researchers believe that all countries combined lost nearly 28 million years of life. The most significant overall drops in life expectancy included Russia, the United States, Bulgaria, and Lithuania. On the other hand, Norway, Taiwan, and New Zealand saw an increase in life expectancy, while Iceland, Denmark, and South Korea saw no changes.
What This Means for Retirement
Life expectancy is always taken into consideration during retirement planning. Knowing the average life expectancy in the United States is key to helping you determine the best retirement age. While the life expectancy decline in the US is troubling, it will most likely not affect your retirement planning due to the lessening impact of Covid-19. Homicides are also more concentrated in specific locations, as it isn’t a widespread problem across the United States. Your life expectancy is probably not much different from before 2020 if you have already survived the more severe stages of the pandemic and if you don’t have a substance abuse problem.
Nevertheless, it’s important to consider life expectancy to help you determine the best choice for retirement age. One way to better plan for retirement is to sell your life insurance policy to receive additional cash to help you with expenses or fund long-term care. A life settlement gives you the flexibility to use this money in any way without restrictions. You can even use some of this money to fund your investment portfolio. Reaching out to a life settlement company is a good idea to learn all of your different options for retirement planning.