What-Age-Do-Most-People-Retire-In-America
00:00:00.000 | What age do most people retire in America?
00:00:04.000 | Given many Americans are in somewhat of a precarious financial situation,
00:00:09.000 | with only about $17,000 in retirement savings for those between the age of 56 and 61,
00:00:17.000 | you'd think most Americans are never going to retire.
00:00:21.000 | I mean, how do you retire with only $17,000?
00:00:24.000 | But the reality is that around 69% of Americans are out of the full-time workforce by age 66,
00:00:31.000 | and roughly 51% retire between the age of 61 and 65, according to LIMRA,
00:00:37.000 | the Life Insurance and Market Research Association.
00:00:41.000 | So by age 75, 89% of Americans have left the labor force,
00:00:46.000 | and thank goodness, because the median age or life expectancy is only around 80 to 85.
00:00:54.000 | But it does surprise me, if you look at the chart, that less than 1% of Americans retire before age 50.
00:01:00.000 | I'm definitely in a bubble here, because I think the financial independence retire early movement
00:01:06.000 | has taken off over the past five years.
00:01:09.000 | I mean, who doesn't want to leave a job they don't really like to do something they really like,
00:01:15.000 | or just do nothing and go travel, or do some writing, or spend time with family and whatnot.
00:01:22.000 | The other thing is that freelance work and work that can be done remotely has really risen.
00:01:27.000 | I think over the next 10 to 15 years, the number of freelancers will surpass the number of full-time workers,
00:01:34.000 | thanks to technology. So I thought the number would be higher.
00:01:37.000 | So if you retire before the age of 50, you are in the 1% of something.
00:01:44.000 | How are retirees able to survive on so little?
00:01:49.000 | Well, the simple answer is that there are traditional pensions that people take,
00:01:56.000 | retirement work plans like the 401(k) and IRA, and also Social Security.
00:02:02.000 | So LIMRA reports that some 41% of retirees have annual income of less than $25,000.
00:02:10.000 | That's not going to get you very far, unless you don't have many expenses.
00:02:16.000 | And then of the retirees with income of over $50,000 a year, about 80% draw from a pension or retirement plan.
00:02:22.000 | So that makes sense. Unfortunately, most of us, well, most of the people under age 40 are not going to have pensions anymore.
00:02:30.000 | I mean, that's crazy. And even if there was such a thing as a pension,
00:02:34.000 | everybody's job hopping every two to three to four years, that you're not going to stay long enough to collect that pension.
00:02:40.000 | So the ultimate focus on retirement savings needs to be on maxing out your 401(k),
00:02:48.000 | maxing out your IRA if you're eligible, and also saving additional after-tax,
00:02:54.000 | after pre-tax retirement account money into a brokerage account.
00:03:01.000 | So you can keep up with and surpass inflation.
00:03:05.000 | You need an after-tax investment account because life happens, right?
00:03:09.000 | Your job is going to change, you might have an emergency you need to pay for.
00:03:15.000 | Who knows? Who knows? You might get sick and tired of your job at age 50, and there's like a 10-year gap.
00:03:21.000 | You have to wait until you can collect on that pre-tax retirement money without paying a 10% penalty.
00:03:27.000 | And then just for added security, I think it's very wise to build multiple income streams to reduce concentration risk.
00:03:36.000 | So rental income, you've got your dividend income, maybe online income,
00:03:42.000 | maybe you're selling one of your products, you're selling some of your services, whatnot.
00:03:48.000 | So also, part-time work is an obvious, obvious supplement.
00:03:54.000 | The typical image I see is a 65-plus-year-old person who is greeting you at Whole Foods or Walmart or Safeway or one of those chains.
00:04:07.000 | And maybe they're only making $10 to $15 an hour, but that work is supplemental,
00:04:14.000 | and that should allow you to pay for some food and maybe some random expenses here and there.
00:04:20.000 | The key really is to have a paid-off house and to have health care coverage.
00:04:27.000 | There is Medicare, Medicaid. I think one of the things you need to be aware of is that health care insurance is so expensive.
00:04:36.000 | So I've been paying something around $700 per month for the past five years in health insurance.
00:04:45.000 | It's an enormous expense, thank goodness. But depending on what your plan is, gold, silver, platinum,
00:04:51.000 | and how much older you are than 35, the range is probably $600 to $1,200 a month in health care insurance,
00:04:59.000 | thanks to our inefficient system.
00:05:02.000 | So the key, stay healthy, eat right, keep on exercising, and just really make sure you have disaster health insurance coverage.
00:05:13.000 | After I left full-time work at the age of 34 in 2012, I never really stopped working.
00:05:20.000 | For maybe six months, I did a lot of traveling, hung out, but I was just more motivated than ever not to fall through the cracks.
00:05:31.000 | I had my passive income streams dialed up. I was working on my online income.
00:05:37.000 | But I basically decided, "You know what? I have the time and freedom now to do whatever I want,
00:05:43.000 | and so I might as well do something that I like to do."
00:05:46.000 | And so that's been writing for the past five, six years, and it's been great.
00:05:51.000 | So I hope this article has helped you guys see where you are on the retirement perspective,
00:05:58.000 | and share your thoughts and comments below. Take care.