A new report by the Employee Benefit Research Institute suggests that many Americans will have a pretty brief retirement since they will have to work beyond the average life expectancy of a citizen before they can afford to retire. The report entitled “The Impact of Deferring Retirement Age on Retirement Income Adequacy,” says that a large percentage of Americans will have to work into their 70s and 80s to afford basis costs of living.
For those Americans earning between $11,700 and $31,200, they will need to work till age 76 to have a 50% chance of covering basic expenses in retirement. Those citizens earning between $31,200 and $72,500 will need to work to age 72. You have highest income quartile (making more than $72,500), you can still retire at 65.
The AARP Public Policy Institute report, “Family Income Sources for Older People, 2009″ notes the growing importance on earnings to support older Americans:
The share of aggregate family earnings income increased steadily, from 26.4 percent of total family income in 1990 to 35.0 percent of total family income in 2009 (an increase of
9.2 percentage points or 34.8 percent). This change indicates that the earnings are becoming a more important income source for older persons’ families.
Here is the EGRI report: EBRI_IB_06-2011_No358_Defr-Ret