The Three Reasons Why Americans Are Now Retiring Later

More American workers are retiring—or planning to retire— later in life, according to a new report.

Gallup's annual Economy and Personal Finance survey in April found the average reported age of retirement is now 61—up from 57 in 1991.

The age workers estimate they will retire has also gone up since the 1990s—from 60 in 1995 to 66 today.

Recent analysis by Gallup listed three reasons that may explain why American workers are retiring later than their predecessors.

Changes to Social Security Payouts

One reason that American workers may be retiring later is because changes made to the Social Security program in the 1980s are now affecting workers of retirement age.

Congress's sweeping reforms to Social Security in 1983 raised the age at which Americans can receive full retirement benefits to 65, although they are eligible for reduced benefits from the age of 62.

Those born between 1943 and 1959 are eligible for full benefits between the ages of 66 and 67, depending on the year of their birth.

However, those born after 1960—the oldest of whom are now 62—aren't eligible for full benefits until they are 67.

Longer Life Expectancy

Americans may also be delaying retirement because they are living longer than their parents and grandparents and need to work longer to shore up their retirement funds.

The COVID pandemic, however, caused the biggest decline in life expectancy since World War II. In the U.S., life expectancy for the total population declined from 78.8 years in 2019 to 77.3 years in 2020, according to the U.S. Center for Disease Control and Prevention's National Center for Health Statistics.

Despite the pandemic-related decline, most Americans are still working toward saving for a retirement that could last decades and be more costly due to the rising cost of living.

Working in Flexible Jobs

The kinds of jobs available for older workers may also be influencing decisions about retirement.

Rather than work grueling manual jobs, older Americans today can find employment that doesn't tax them physically.

According to the U.S. Bureau of Labor Statistics, the number of people over 75 in the labor force is expected to grow by about 96.5 percent by 2030.

And part of that could also be because the Internet has facilitated a new and flexible way for older Americans to earn money through gig work, such as by driving for Uber.

A 2021 survey by the Pew Research Center found about 20 percent of gig workers in the U.S. are over the age of 50, with about one-third of those being over the age of 65.

A Social Security card
A file photo of a social security card alongside checks from the U.S. Treasury. More American workers are retiring—or planning to retire— later in life, according to a new report. Kevin Dietsch/Getty Images