Washington, D.C. – Many American workers aim to retire at 65, the traditional retirement age in the United States. However, recent research reveals that most individuals actually exit the workforce earlier than expected. The median retirement age for Americans is 62, indicating that the typical worker retires about three years earlier than planned, according to a study by the Employee Benefit Research Institute.
This disparity highlights the challenge between retirement aspirations and the reality faced by many individuals. While there is a growing perspective advocating for Americans to work longer to secure their financial future, the research indicates that a significant number of seniors are compelled to retire earlier due to various factors, often beyond their control.
Despite the desire of some individuals to extend their working years, the study found that not everyone has the opportunity to do so. Craig Copeland, director of wealth benefits research at EBRI, emphasized that suggesting everyone work longer may not entirely address the retirement financial challenges, as many individuals may face circumstances that prevent them from continuing to work.
The report revealed that seven in 10 retirees ceased working before reaching the age of 65, with about half of them stopping earlier than anticipated, primarily due to reasons like health issues or disabilities. Only a minority of retirees cited financial readiness as a factor for early retirement.
Concerns are raised over the financial implications of this gap between retirement expectations and reality. Many Americans lack substantial retirement savings, with a considerable number having less than $50,000 saved, significantly lower than the perceived need of $1.5 million for retirement. This disparity underscores the importance of effective financial planning for retirement.
While many workers rely on Social Security as a source of income during retirement, the program is projected to face a funding shortfall in the near future, potentially leading to reduced benefits for retirees. Despite these challenges, current retirees generally express optimism about their retirement, with most reporting that they are living the retirement lifestyle they envisioned.
Overall, the findings indicate a need for individuals to carefully plan and prepare for retirement, taking into account potential challenges and unexpected circumstances that may impact their financial security in later years.