Inconsistencies in Retirement Age

Retirement is becoming an increasingly important issue primarily because of escalating costs and demographic changes. The three largest retirement systems under the jurisdiction of the Federal Government are social security, the Civil Service Retirement System, and Department of Defense Retired Military Personnel. These three programs made benefit payments to 35.6 million beneficiaries in 1976, and the number of people retiring is increasing.

Because of the declining birthrate and deathrate, the population of the United States is aging. This trend, plus the declining rate of participation of persons 55 years of age or older in the labor force, has led to a decrease in the ratio of working to retired persons. Different age limits for retirement have been based on different needs of the systems involved. The normal retirement age for social security benefits is 65, but individuals may retire earlier with reduced benefits. Civil service retirement is based on age and service requirements. The average age of annuitants dropped by 6.4 years between 1940 and 1975. Career military personnel may retire after 20 years of service with pensions based on years of service with no age requirement. Retirement plans are allowing people to retire at younger ages, and benefits have been liberalized. These factors will seriously affect the funding of retirement programs and financial requirements of the Federal Government. Concern has also been expressed about the social, psychological, and physical effects of retirement on individuals.