ELDER MUSIC: Sleepless Nights
Growing Old with Grace

Early or Late Retirement?

For all my life, 65 was the traditional retirement age. In the United States, that number came into general use for this purpose when Social Security was created in 1935, and 65 was set then as the age to receive full benefits.

In fact, before Social Security, the idea of retirement barely existed. It's invention is traditionally attributed to then-Chancellor Otto von Bismarck of Germany in 1865, when he announced a government pension to any non-working German 65 or older thereby inventing in one fell swoop both Social Security and the year at which old age is said to begin.

(There were, of course, political reasons for Bismarck's move. If you're interested, look it up – it doesn't apply to today's post.)

Nowadays, the age for full Social Security benefits in the U.S. is 66 and rising. By 2027 it will have reached the “new normal” of age 67 – one of the oldest in the developed world. Only Germany at 67 and the U.K. at age 68 match or surpass the U.S. although some other countries are beginning to increase retirement age.

Over the weekend, I came across a new study from Merrill Lynch [pdf] about retirement. Of course, because Merrill is an investment firm, it is mostly about financially well-off people – the kind with money to invest which I doubt is a majority. But a couple of their charts caught my attention.

This one, for example, about the percentage of people who retired early, at the age planned or later than scheduled (asked of retirees only):

Percent Retiring on Time

(The survey was conducted from December 2012 through January 2013 of 6300 people age 45 and older - approximately half with investable assets of between $250,000 and $3 million.)

I was struck by what seems to me to be a huge number who retired earlier than intended – 57 percent. What could be the reason for such a high number leaving the workforce?

At age 63, I retired long before I had any thought of doing so. A year after being laid off, I had not found work, was digging myself into a gigantic debt hole and the only way out was to sell my home. Not an ideal situation.

So I wondered how many others, particularly after the financial collapse, had been forced into a path similar to mine.

Well, there's a Merrill Lynch chart for that giving five reasons:

• Personal health problem
• Sufficient financial resources to retire
• Lost my job
• More time with family
• Had to look after a family member

Here's the chart with the percentages. It's obviously way too tiny to read so click it for a larger view.

Reasons for Early Retirement

Nearly one-quarter, like me, retired because they lost their job. Unfortunately, the survey doesn't give ages at which that 24 percent retired or tell us if they spent a lot of time working their tails off to find work only to be thwarted by age discrimination.

It's true I can't prove that last statement but it's a good indication what's going on when an interviewer who thought you were hot stuff at 4PM yesterday on the telephone informs you in person at 10AM the next day that the job has been filled and oh, my – so sorry someone forgot to phone you.

And although the number of people age 55 and older who are working is up by more than 4 million since 2009, it takes a full year – 51.3 months – for old people to find work. And that's counting only the ones who do find work. Two million more, as of December 2012, were still looking.

As awful as unemployment is for workers of all ages, for older ones there are not the years left to make up the lost wages and savings that (hopefully) the younger ones will have.

So what happens when a person is forced to take early Social Security is that the benefit amount is reduced from about 25 percent (at age 62) to 6.7 percent (at age 65) for the rest of your life.

I was luckier than many people. Although I was laid off at age 63, spent until age 64 looking for work and another year waiting for my home to sell, I was able to squeak by – thanks to a good price for my home – with careful frugality until I reached full Social Security age of 65 and eight months.

The question today is, did you retire early and if so, under what circumstances? If you are not yet retired, what are your plans and will you be able to fulfill them?

As always with personal questions, feel free to post anonymously in the comments.

At The Elder Storytelling Place today, Deb Cavel-Greant: Sometimes It's Best to Keep Your Mouth Shut


At 52, the 1992 recession killed my career. Eventually, I got a job out of my field (much less money) and stayed in it until health reasons led to retirement at 70; I wish I had retired at 65.

I am 61, and will work until age 68 at least for financial reasons, unless I get laid off or quit in complete frustration (not unlikely in my present circumstances). I expect my husband and I will sell our house as soon as we quit working full time and move to the eastern shore of Maryland to be closer to our son.

I got laid off in 2009, found the jobs market almost void of anything I could handle. Attempted to draw unemployment benefits but the hassle it involved didn't seem worth the effort so I avoided that.

I had a healthy IRA built up and with that and decent severance pay, cleared all of my bills except the mortgage and retained enough to draw a $2000 stipend a month. My wife still had here full time school nurse job which gave us a good income and access to health benefits. I became eligible for early retirement in December 2010 so I took advantage of it and settled into retirement.

It's worked out pretty good for us but had that IRA not been there and my wife's full time job, this could have resulted in a more disastrous outcome

At age 52, I moved to accommodate family, taking a 1/3 cut in pay for the rest of my professional life in the process. So...I semi-retired 14 years before I took full retirement at age 66. Having had no thought of retirement, I made the decision during my drive to work one morning. I decided that working was no longer as much fun as I wanted it to be, and upon arrival at work, gave my boss my 3.5-month notice.

My husband had made a similarly sudden decision eleven years earlier at age 56. (He started drawing SS at age 62 - bad mistake!)

Obviously, we are among the fortunate who could afford to follow our whims.

We don't live lavishly (I buy most of my clothes at second-hand stores, for goodness sake!), but we don't worry about our next meals, either. Some years ago, a financial advisor became frustrated with me because there was/is nothing that I wanted to do with my money. I told her that I just did not want to worry about money!!!!

I never formally retired, but quit working for other people at age 51 when finances allowed me to make that choice. Now I work with my artist husband which is more than full-time, but I do not draw a paycheck, and started taking SS as soon as it was available to me at 62 (earlier this year). I was advised by my financial advisor to take it as soon as I could.

I was lucky enough to have the sort of job where I was able to scale down very gradually, starting at age 53 and not quitting my profession entirely until around 70. But it also helped that we deliberately and happily downshifted to a very simple lifestyle, so that when the time came that we were living just on basic pensions we could easily manage (and still do).

I just retired, will be 65 in a few months. I decided not to work another summer, and I could afford to retire, so I did. I will start drawing Social Security soon. If I were a single woman, I would have continued working another year and a half and would not take Social Security until 66. I'm married, and we have other retirement funds, so this was a reasonable option. My husband retired completely a couple of years ago.

I was lucky, I had a good job and one that I enjoyed, but it was time to leave while things were going well. However, as I said, if I were single, I would have made other choices, even with the additional retirement funds, because I see women friends who retired at 60 or 62, and they really are limited in their options now.

I will have to make the decision later this year to either take my SS early at 62, or try to tough it out until age 66. I keep hearing conflicting advice about whether you are better off taking the money early or waiting until full SS retirement age. I wish I knew how to make the best decision.

I just decided to take the money and run this month at age 62. We need that money to help pay our bills. Your take will be reduced by 25%, but you're betting that you will live a long long time. There is a break-even point, you might want to calculate what that date is for yourself. That helped me make my decision. If I had waited to draw until full retirement age I would have lost 4 years of very meaningful monthly checks. My break-even point is in 16 years when I'm 78 years old. Other factors informed my decision, which I won't go into, but each person's situation is different, and the popular idea (read: pressure) that you should wait for your full retirement age isn't the best decision for many of us.

We both took our SS at age 62 because of job loss, although we were employed part-time after that. At 71 I was just severanced out of a job in March (although I was planning on working until age 75) and my husband has been in the nursing home since January at $6900/month. I am really challenged by the financial aspects of these changes. There is very little help out there to find out what one should do to maintain and a person could easily fall between the cracks. I think I have found the help I need, but it will probably result in selling my home and moving in with my daughter who is really excited about this prospect.
What a person really needs is someone to talk to, at a highly emotional time like this, that knows what the options are and what the caveats are. Well, I guess what we are here for is challenges and I feel I am up to this one, although it is daunting on some days!! As an option for Social Security (which I wish I had done) is for women to take half their husband's social security at 62 and then let their SS sit until 70, as they would get a much bigger amount then. Just a thought!!

I retired at age 62 as a psychiatric/ chemical dependency nurse because I wanted to and my husband didn't. His working half time and my collecting social security has enabled us to be okay. And we moved to an affordable area of Italy (Abruzzo) and became part of the Italian health care system so our cost of living is less.

In September 2008 my income fell off a cliff. I had been a recruiter in NY for 33 years...working on commission. The field was good to me and I had weathered other recessions. As I watched my house value and 401K drop...I started to get scared...this one was feeling very different. So, I made all the hard choices. I sold my house (was lucky that I could) and moved in with a friend for a while (didn't do much for my ego). I kept working...hoping things would change. They didn't. My son and his family had moved to Vermont, I was turning 66 and single, so I retired and off I went to Burlington Vermont. I am lucky, things worked out...I like it here. I miss NY and my life there...but this new chapter is ok.

Technically, a job loss was the reason for my early retirement, but a worsening hearing loss made finding employment at the age of 59 nearly impossible. I had rejection after rejection and I refused to clean other people's toilets for a living. That seemed to be the only job opening I could find.

I was too young to collect SS. I existed on unemployment benefits and managed to eke out a living until I was 62 when I went on my husband's Social Security. Taking the funds early was not the wisest choice for me (who knew I would live this long?) but it was a necessity. I did not have an IRA or pension so it's a good thing I learned how to be frugal early in life. I am doing fine and don't have to worry about choosing whether to buy groceries or my medicine. My home is paid for or I could not make it.

I was laid off at age 55 by a new, very young boss. I had a great resume for someone in editing/publishing, but after several years of job hunting it became apparent that between my age and the tightening job market in a struggling industry, my years in publishing were over. On advice of family, for reasons that made sense at the time but that I don't remember now, I opted for Social Security at about 64. I get by with some help from a relative and am in a little house with a new (5 years old) mortgage. I won't live long enough to pay it off, but with a refi last fall, the payments are less than half what my apartment rent was.

I left my job in Seattle in 1999 at 57 for several reasons, primarily to go from from Seattle to Portland to care for my dying Dad. I did take a 90-day family care leave just in case I changed mind. My house had recently sold and I'd purchased one in Walla Walla to which I intended to retire to but was planning on renting it out in the interim.

My father recovered, yea and when it came time to go back to Seattle I couldn't face my job and believed I was likely to get laid off as well. So I moved into my empty Walla Wall house and found a job in about 3 months at a call center paying 1/3 of what I previously made. Fortunately it was adequate and I came with a tiny pension and paid for medical benefits. The house payments were $350 a month, I'd chosen to keep some of the $$ from the old house sale for emergencies. My former job and the whole group of 13 working in it were gone two months after I left, laid off.

It was bumpy; I took another job a an editor at an educational software firm. it paid more money but lasted only 8 months when the company was folded into an larger company in California. We were surplused with 90-days pay. Then I got a job with the local community college, and finally a job at a not-for-profit running a job center and computer training lab. It came with bennies and great co-workers. I retired from that job. I took SSI at 65 when Medicare kicked in and my free medical bennies went away. My health was not holding up. I took money out of my already halved 401k and paid off the mortgage on the house and my car payments. I started getting IRA distributions last year so I am comfortable now. I would have a hard time making ends meet if the house wasn't paid off. I worry I will outlive my money. My oldest son, over 40 and an insulin dependent diabetic just lost his job and of course medical bennies. I can't afford to fund him until he is employed again but he can move in with me as I have a spare room. Not his first choice but he's good company. It would be a big adjustment for both of us.

My Dad, who's 93, took early SS retirement at 62. He's in good shape economically; but, in his case, a later SS retirement would have been a better choice.

Hard to foresee the future.

I didn't figure I'd still be working (20-30 hours/week) at age 76. My husband finally retired 7 years ago when he was almost 77. We both started collecting S/S at the then-normal retirement age of 65. In retrospect, if I'd known I'd still be working, I'd probably have waited until age 70, but that wasn't a well-publicized option 11 years ago. We had planned based on at least a 4% return on our investments--yeah, in our dreams!

Fortunately, the nonprofit where I've worked for the past 37+ years doesn't jettison older employees if they can still do the job. If our nest egg earned enough to replace the lost income, I'd probably retire at the end of this year. It doesn't, and a regular paycheck has made the difference between having to watch every penny and being able to do more or less what we want.

I hasten to add that we don't travel, our cars are almost 15 years old and my clothes are mostly gently-used. Our lifestyle is far from lavish. Still, with my paycheck, we can save for the ever-increasing LTC insurance premiums and afford necessary surgery and vet care for our 11 Y/O cats, charitable contributions and dinner out on special occasions. It's made the past 10 years more enjoyable. Sans paycheck, all of the above would be more of a struggle. When I do retire, we'll definitely have to cut back unless our savings can somehow generate more income.

When I was 49 I was fired from my last corporate job. Not wanting to go back to that life, I thought about what I really enjoyed - animals - and, with previous experience training and showing dogs in obedience, got a job working 20-30 hours a week in a kennel.

With an English degree and animal experience, I started writing animal articles as a freelancer and then added photography. Soon I was covering quilt shows, general feature writing,and,finally, local politics.

My husband worked for a large international company for 33 years, until at 56, he happily took a buy-out that included a pension and medical coverage.

We always lived a simple lifestyle and had paid off our mortgage early in anticipation of taking an early retirement. We also had sufficient financial resources and received two inheritances.

So, yes, we retired earlier than we had planned, but financially it worked out well.

On the advice of our long-time financial advisor, my husband took his SS at 62 and we invest it. He also advised that I do the same, but I have put it off.

My husband quit his job in 2003 to move to Colorado where I worked, and he worked at temporary jobs for many years until finally taking early SS at 62, sick of the age discrimination. I continued to work until I was within 6 months of full SS retirement. Because of retirement funds we built up at my job, we retired in March 2008 and moved our retirement into annuities in January 2008. Had we waited another year, we would have lost at least half of that annuity income!

We rent an apartment in Washington state, have enough money to pay the bills and put a little away each month. Our health care is a bit pricey but very adequate. We were just fortunate we cashed in right before the crash.

Please remember that if a "new, very young" boss fires you and you are replaced by a young person, this is against Federal laws as is being fired for any kind of disability!! Any good employment attorney will take your case as a contingency. I am a paralegal still working at age 69 1/2 and hope to retire in 10 months. I wont have much, but I think my quality of life will be hugely better. I have only myself, no husband, to depend on and its very scary!!

I lost 2 jobs in 2007 and spent two-and-a-half years trying to find another. Finally, just before I turned 61 I found out that as my ex-husband had died while on Social Security and I had just about no hope of finding a new job I could go on Social Security as a 'divorced widow'. I didn't really have much choice. The prolonged period of unemployment had thoroughly depleted my meager savings and put a severe strain on my mother's finances which are almost entirely Social Security. So far our combined SS provides a comfortable living but we are frugal. We can cover our needs and don't have any extravagant wants. I have no desire to go back into a workforce that has nothing to offer me besides subsistence wages.

I retired from teaching at 58. Thru wise (or lucky) investments, and having pensions for both my husband, 75, and me at 70, we felt we could live comfortably, which we have so far. Our health is good; I go to the pool 5 days a week, my husband rides his bike. We have been married 50 years and going strong!

I had to go on Social Security Disability when I was still in my 40's. This is the time when most people are earning their highest wages, which in turn is reflected in your future fatter SS cheque. I am not sure what happens to me when I turn 62 in a few years. Will I continue to get what I get now or will it go down (sigh) because I am eligible for regular SS? I have not been able to find any real help to deal with all this bureaucracy and have had to navigate everything on my own.

The year that people retire with full benefits should be weighed against what sort of work a person has done most of their adult life. I was in retail in very harsh conditions for more than 20 years. No one can stand 10 hours everyday in the cold when they are say 60.. nor would they be hired for a job like that. Shouldn't construction workers get to retire earlier than office workers?? There should be other provisions in the law. Also, many retail workers and other groups working physical jobs (non-union) don't have pensions or other company plans either, and would never be let go with any sort of severance. When my mother used to tell me that life was not fair I should have listened to her.

When my new husband took a very good early retirement offer from his University at age 61, He made me an offer I couldn't refuse. So, at age 55, and after only 15 years working full time, I joined him in retirement, we bought a sailboat and went blue water cruising. I had insufficient income from a divorce agreement to contribute a full half of the costs, so, when I reached 62, I started Soc. Security. My full financial story after 22 years is convoluted, but by dint of good management and lucky timing in the housing and stock markets, I am able to hold up my end of our joint expenses.

My four daughters, aged 45 to 51, all expect to have to work to 70 and beyond and then be scraping by. I think mine was a very lucky generation who grew up during the economic boom years and retired just in time for the stock market run up of the 90s. We live comfortably and are thankful to have the peace of mind Medicare offers.

Married couple, retired at 48 and 55, achieved as a result of a lifetime of living significantly below our means. My husband had been focused on early retirement since he graduated college and entered the workforce, and every financial decision we made as a couple was with that goal in mind.

We both left our jobs voluntarily, and are continuing to live below our means, with an average withdrawal rate of 2.75%. We are extremely healthy, and after one year of budgeting for our high deductible health plan, are now able to reduce our allocations to just the premiums, which represent less than 5% of our budget.

I think the wisest thing we did was to set our standard based on 75% of one income, and bank the remainder, including mine when I eventually returned to work after raising our daughters.

I recently applied for a job. The prospective employer apparently liked my resume and immediately contacted me via email and phone and set up an interview. As I arrived at his desk, I had barely taken my coat off when he informed me that there were no positions available.
I'm 62 years old, cute and adorable but have gray hair. Use your imagination on why all of a sudden there weren't any positions open. It was barely a week since the help wanted ad was printed.
I took my SS at 62. I had enough. I really don't care anymore what will happen to me. My home has been paid off for 10 years. My paid off car is 2 years old. I have no debt or charge cards. I'll be just fine. I get health insurance through my husband who works part time. He thinks he has 6 more years to work. I tell him he'll never make it past a year. His salary and hours have been systematically reduced over the years. We pay our own health care. Who needs them, that's what I say! I get $1000 per month SS. Husband will get $1500 a month at 62.Plus we have our savings. I will never get over how I am being treated for simply doing what I do best: stay alive. All I am guilty of is living.
To hell with all of them!

I was forced into early retirement at only 2/3s of my retirement benefit due to Hurricane Katrina in 2005. I was almost 63. Every teacher in New Orleans was terminated and I was so close to retirement, it made sense to take it early. I did secure an occasional job that I held until a few months when my office closed. I don't get SS as my school system didn't pay into it. I live very close to the bone these days, but see it as a challenge to live well on very little. I am healthy and happy and only once in a while have a panic attack about the "what ifs".

Note to Lynne who is on disability - your benefit amount will not change because you turn 62 or 66. Call your local Social Security office and they will verify that. Also, there are area agencies on aging in every state that should have a lot of answers for people about their social security and Medicare concerns.

I really feel for the many intelligent, competent, skilled people who have caught the short end of the employment stick due to apparently flat-out age discrimination. It doesn't help now, but the young bosses who fired/didn't hire you won't always be young, and I'm a great believer in "what goes around comes around". When what they did to you happens to them, as it very likely will, maybe you'll be a "Ghost of Workers Past" perched on a shoulder--laughing!

No, that's NOT a kind thought and I try to be a kind person, but what has happened to you through no fault of your own isn't kind either!

I retired from the USPS at age 58 to care for my husband after his heart surgery, a heart attack, and a stroke. I had used up all regular and sick leave and Family Medical Act leave. I quickly applied for disability for him from social security. I received it in about four months. I was able to get a very small pension from the USPS. We had personal IRAs and a savings plan from the USPS. I was good about saving although we ended up losing $10,000 in the crash. I turned the IRAs into monthly annuities and with his disability and my pension we got by with $3,000 per month. That sounds like a lot but we have $1,300 in mortgage and property taxes each month so what is left is for insurance, utilities, gasoline, phone, Internet, TV, medical,etc. and I don't pay high rates for this. Food is not in this mix! It was hard. A lot of oatmeal, soup, beans and vegees and fruit. He has since died this last February. His disability was reduced as I am only 60. But being single now I can tinker more with the food expense. Did I get life insurance? Only $50,000 thanks to USPS and a no medical exam business policy as he had pre-existing conditions. That will be gone in no time as the house needs paint and other upgrades so I can sell it. Plus I need a cushion just in case. I'll be OK.

I retired from teaching high school at age fifty-three. I began teaching when I was twenty-one. I receive a full pension which I supplement by selling antiques and collectibles online and at local shows. This year I turn sixty-two, and I am taking my social security then.
My husband and I also built a vacation home which is on water in a desirable area of the country. We camped in a pop-up trailer, cooked over an open fire and bathed in the bay for seven summers while we saved to get the basic structure up. We were in our thirties and forties then. Now we have a very nice second home which we are starting to rent for extra income. I am fortunate to have a pension from teaching which I view as my prize for the low salary I received.

I quit my job at age 62 when the department laid off all the workers - and told me that I could now do all of their work. All 15 of them. For no more money. Thankfully, I had seen the writing on the wall years before and had saved, brown bagged and pinched my pennies so my savings were adequate. I did some temp work but even that dried up so took Social Security earlier than I had planned. But my pension, plus social security plus a very frugal life style has allowed me to enjoy my life, instead of working like a slave under the lash. I preferred to keep my health and have the time to follow a 2nd stage career as an arts writer and blogger. But I know that I was fortunate to have a pension, no expenses and a modest amount of savings. At age 62 (then), I saw what the job market was like for older people and it was not pretty -so I'm glad that I had the options that I did. A lot of people don't.

Retirement takes some planning, which most people either don't do at all or put off doing. Fortunately I am married to a man who was self-employed and began early in his career to put money into a retirement plan. We retired when he was 59 and I was 58 and now collect Social Security (beginning at age 62) in addition to taking a modest monthly payout from our retirement plan. I can't imagine not opting to to take SS early--there is no guarantee how long one will live and in our case, we would have to be in our 80s to break even. The one concern anyone retiring should have is healthcare costs--for us, we decided to retire in Canada, where I am from originally and healthcare is not the big concern it is in the US. If we hadn't done that, the health insurance payments alone would have been a major expense for us until we reach Medicare age. Because we are both US citizens, we will be eligible for Medicare when we are travelling in the US at age 65. I'm a dual citizen and my husband has recently applied for Canadian citizenship. It may be too late for some of you reading this, but my advice is to learn to live somewhat frugally all your life, regardless of your income, and plan ahead. You won't regret it when it's time to retire--you won't notice a decline in lifestyle that many experience.

Why can't we have Social Security starting at birth? A small amount every month building up for life.
It would guarantee a decent life for everyone without this terrible dependence on a job...and the awful fear when you lose that job.
After all, how many interesting jobs are there? All too many are boring beyond belief.
Just my two cents.

I came out of a 22-year marriage with a dream house that I couldn't afford on a freelance musician's income, child support and short-term spousal support. I rented out every corner of the big house that my young son and I didn't need in order to try to meet bills. I took a business flyer that failed, took every music-related job I could get and survived--barely.In 11 years, my son was 20 so I sold the house, took an apartment and lived on gigs and a steady year-round teaching job. Just a few months before taking s.s.I retired to spend the entire summer on radiation for breast cancer. Later I was lucky to get into subsidized housing, lost nearly half of my savings as most of us did, continued to pinch every penny, but s.s.tripled when my ex died.
I'm still frugal, and have large medical insurance bills, but am able to loosen my belt for pleasures, one of which is giving to my kids, who have been affected by medical costs and lay-offs.

I have been laid off at 58 because I don't fit the "face" of our department anymore. Will take state retirement and hope to find a job not in the Texas Teacher Retirement system. I taught for a while, but was the Director of HR for our school district for many years. Nervous!

I retired early (age 57). Got laid off from Cisco when they moved a bunch of their IT jobs to Bangalore. Tried for about a year, here in Sweden, to find another job. Couldn't. Gave up.

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