Americans are more confident than ever about their chances of experiencing a comfortable retirement, but there’s a thing they are seriously delusional about: when they will finally call it quits.
According to the Employee Benefit Research Institute’s latest retirement confidence survey, there’s a significant gap between when workers expect to retire and when people actually retired or left the workforce. Half of retirees say their retirement came earlier than planned.
Out of 10 workers being surveyed, less than one say they expect to leave the workforce before the age of 60. However, 35% of retirees say they stopped working before the age of 60. Comparatively, only 28% managed to retire between the ages of 60 and 64 and only 9% made it to the traditional retirement age of 65. Even slimmer percentage those who made it until age 70 at a mere 6% when, in fact, more than a quarter of workers say they want to do.
It’s clear in the study that the majority of premature retirees did not leave work because that was their plan. Sixty percent of early retirees say they had to retire because of health problems or disability issues. Twenty-seven percent say their company closed or downsized, and 27% cited taking care of a spouse or family member.
When People Plan To Retire
When People Actually Retired
These stats aren’t consistent with the retirement narrative that came out in the years following the Great Recession. The general instruction for older workers whose savings were significantly affected by the financial crisis was to lower work longer and perform more with less. Almost 70% of workers say they want to keep making money after they retire by continuing to work part-time. However, in reality, only 23% of today’s retirees say they’re working for pay in retirement.
The expectation gap is quite alarming when considering the reason people are so eager on dragging out their working years. Although, nearly all retirees who are working in retirement say they do it because they enjoy doing so, more than 50% admitted they needed the extra money to make ends meet. Around 40% said their investments and savings had dropped steeply.
There are real financial consequences for workers who did not mind their retirement age enough. They may not save enough money to last them through their golden years.
The report says “Retirees who retire earlier than planned are more likely than those who retire when expected or later to say they are not confident about having enough money for a comfortable retirement,” or perhaps about paying for long-term care expenses, medical expenses, and basic expenses.
This year’s EBRI survey wasn’t all negative for retirees. Workers today are more confident about their chances of experiencing a comfortable retirement than they have in years.
Workers who are very confident about retirement up from 13% in 2013 to 22% in 2014, and almost as high as the rate among workers prior to the recession. Forty-eight percent of workers are taking proactive steps calculating the amount of money they need to save for retirement now for later use, up from 44 percent in 2014.