Many American workers believe they will retire at the traditional age of 65, but new research shows that the median retirement age in the United States is actually 62. This means that the typical worker is stepping back from their career three years earlier than expected. Despite the push for Americans to work longer in order to afford retirement, many seniors are forced to retire before they are ready. This discrepancy highlights the gap between retirement goals and reality, with many retirees stopping work earlier than planned, often due to reasons beyond their control such as health issues or disabilities.
The new research found that seven in 10 retirees stopped working before the age of 65, with about half citing reasons out of their control for their early retirement. One-third mentioned health issues or disabilities as the main reasons for retiring earlier than expected. Only 2 in 5 retirees were able to stop working earlier than planned because they could afford to do so. This disparity between expectations and reality can have troubling outcomes for retirees who may not have saved enough for their retirement years. Many older Americans lack retirement savings, with a significant portion having nothing saved for their old age.
According to the Employee Benefit Research Institute (EBRI) study, only about half of workers have calculated how much money they will need in retirement. Of those who have examined their financial retirement goals, one-third believe they will need at least $1.5 million. This figure aligns with other research showing that the typical worker believes they will need $1.46 million to retire comfortably. However, many Americans have far less saved for retirement, with about one-third of workers having less than $50,000 in savings and investments. While most workers expect Social Security to be a source of income in retirement, the program is facing a funding shortfall that could lead to benefit cuts by 2033.
Despite the financial challenges facing retirees, current retirees are optimistic about their lives, with two-thirds saying they are living the retirement life they envisioned. However, the journey to retirement can be stressful for many Americans, particularly those who are forced to retire earlier than planned. The gap between retirement goals and reality highlights the need for better financial planning and education around retirement savings. Working longer may not always be a viable solution for retirees, as many face obstacles beyond their control that force them to stop working before they are financially ready. Addressing the challenges of retirement planning and ensuring financial security for older Americans will be crucial in the years to come.
