According to recent surveys, the average retirement age in the U.S. is about 62 years old. This is despite the fact that most workers expect to retire around 67. More than 56% of retirees left the workforce earlier than they planned.
Health is a significant factor in early retirement, with roughly 38% of early retirees saying they had to stop working because of health issues or disabilities. Job market dynamics also contribute to earlier-than-expected retirements. Fourteen percent of those who retired early did so after being laid off.
For many, finding another job isn’t appealing or feasible. In addition to these reasons, life events like family changes or unexpected financial shifts can also force people to reconsider their plans. Some may find they’ve saved enough to retire early, but for most, it’s often a combination of circumstances and necessity that leads them there.
Financially, retiring earlier than planned can be a challenge. Many people end up dipping into their savings sooner than expected, which stretches their retirement funds thinner over a more extended period.
Retiring earlier than expected
According to various reports, the average American retiree has around $269,078 saved for retirement. This is far below what’s typically recommended. Financial planners suggest a target of around $572,000.
If people claim Social Security benefits before they hit their full retirement age, which is 67 for many, they’ll see a permanent reduction in monthly benefits. If they retire before Medicare eligibility kicks in at 65, they may face gaps in coverage. Planning to work longer might not be the foolproof strategy some hope it will be.
Between health issues, layoffs, and other unexpected life events, early retirement happens to more people than you might think. Without enough savings, the financial burden can get complicated fast. While everyone’s situation is different, having a backup plan and saving more now might be the safest bet for those who want more control when they retire.
It’s always smart to reassess your retirement plan to get a clearer picture of where you stand. Financial advisors can help adjust your savings strategy, review your investment options, and ensure you’re prepared for any surprises that could force early retirement.
