Retirement strategy now is nothing like it was 100 years ago, and for today’s college graduates the retirement outlook is even more uncertain.

Gone are the days of relying on Social Security to provide for a comfortable retirement. For many of my baby boomer clients, Social Security provides a nice cushion for retirement savings but nowhere near what those clients need to survive.

With the life expectancy age ever increasing and the retirement age decreasing (or is it?), we have to fund our retirement years for longer than ever before.

Current average age of retirement

Statistically, we can look at the Social Security Administration’s guidelines for retirement. The full retirement age is currently 65 for most people (those born before 1937) and somewhere between 65 and 66 for those who reached retirement in the past 10 years. This is the age when folks can begin to collect their full Social Security benefits.

Does this mean that everyone automatically retires at age 65? Not at all.

It’s almost impossible to figure out the real average age of retirement because it varies by gender, by profession, and by personal circumstance.

Some people choose to retire in their 50s, either because they are financially secure and can do so or because they are forced to do so by job limitations or other circumstances. Others work into their late 70s or 80s because financially they need the income or because they just enjoy working. The majority of people retire somewhere between the ages of 55 and 70.

My clients who retire before reaching the reduced Social Security age (commonly 62) find that this choice puts a greater strain on their retirement portfolio. I typically recommend that they work to at least the reduced Social Security age so that they have a greater chance of not outliving their nest egg.

Without the proper retirement savings nest egg, you’re going to be facing some tough financial times in your retirement and your credit could start to suffer.

How has retirement strategy changed?

If we look back about 100 years, the average life expectancy for an adult male was 50 years old. Most people didn’t retire because they didn’t live long enough to do so. For those that did live a long life, the age of retirement was 74, and most people who reached that age and retired didn’t live long afterward. At that time, one percent of the population was at retirement age.

Fast forward to the year 2000, when 15 percent of the population was at retirement age. Two factors played into this huge increase. One, the average life expectancy had jumped to 73, and the retirement age had dropped to about 62. A lot more people were living longer into retirement and, as a result, relying on pensions, employee-sponsored retirement plans, and Social Security.

Jump to current day, when the economic crisis has raised many questions about retirement. Many companies are no longer offering retirement plans, pensions are virtually non-existent, and many question the stability of the Social Security program. Life expectancy is still increasing, and now the age of full retirement is going up. Those now in their 30s and 40s won’t reach full retirement until age 67.

What should today’s college graduates expect for their retirement?

There is only one thing that is certain: Today’s college graduates need to begin planning and saving for retirement sooner rather than later. They should expect to have to help fund their retirement with personal savings, and they can’t rely on pensions or Social Security. With inflation, increasing life expectancy, and the age of retirement benefits increasing, today’s college grads don’t have a choice but to begin planning their retirement savings now.

READ MORE:
Expert Retirement Advice: Bud Hebeler
Retirement Planning: Most Affordable Places To Retire
Investing Advice For Selling Your Gold

Jeff Rose is a CERTIFIED FINANCIAL PLANNER™ professional and an Iraqi combat veteran. He blogs at Good Financial Cents, Soldier of Finance, and Life Insurance By Jeff. Follow him on Twitter: @jjeffrose