Current:Home > ScamsPlanning on retiring at 65? Most Americans retire far earlier — and not by choice. -NextGenWealth
Planning on retiring at 65? Most Americans retire far earlier — and not by choice.
View
Date:2025-04-19 03:50:48
American workers by and large believe they'll retire at 65, the nation's traditional retirement age. But real life often gets in the way of those plans, with new research finding that the majority actually step back from work far earlier. And for many, it's not by choice.
The median retirement age for Americans is actually 62, meaning that the typical worker is stepping back from their career three years earlier than expected, according to new research from the Employee Benefit Research Institute, a nonprofit focused on employee benefit programs.
The findings underscore the gap between retirement goals and reality. One increasingly popular idea, often promoted by lawmakers and business leaders, is that Americans should work longer so they can better afford their golden years. Because millions of workers are woefully lacking in retirement savings, working longer is seen as a way to solve their funding gap. In reality, however, many U.S. seniors are forced into retirement before they're ready.
But even when people want to work longer, they're not always able to, the new research found.
"It's hard to make that case that everyone should work longer and that will solve the problems we have in retirement," Craig Copeland, director of wealth benefits research at EBRI, told CBS MoneyWatch. "That clearly won't solve all the problems because many people just can't do it."
Seven in 10 retirees stopped working before they turned 65, the report found. Overall, about half said they stopped working before they had expected, with the majority blaming reasons out of their control. For instance, about one-third cited a health issue or disability for their earlier-than-expected retirement.
Only about 2 in 5 said they stopped working earlier than expected because they could afford to do so, the research found.
Within that gap between expectations and reality lies the potential for some troubling outcomes. For instance, workers who plan to retire at 65, but are forced to stop working years earlier, might not have enough saved.
Already, many older Americans lack any retirement savings, with a new AARP study finding that 1 in 5 people over 50 have nothing saved for their old age.
Needed: $1.5 million
The new EBRI study, which polled 1,255 workers and 1,266 retirees in January, found that only about half of workers have calculated how much money they'll need in retirement. Of those who examined their financial retirement goals, about one-third believe they'll require at least $1.5 million, EBRI found.
That jibes with other research that found the typical worker believes they'll need $1.46 million to retire comfortably. But in reality, most Americans have far less, with EBRI noting that about one-third of workers currently have less than $50,000 in savings and investments.
Americans may be picking big numbers because of the rule of thumb that you should have about 10 times your salary saved for retirement, Copeland noted.
"So if you are making $100,000 or $150,000, $1.5 million is a simple calculation to get you there," he noted. "They are realistic in what they need, but I'm not sure they are realistic in what they need to save to reach that number, and that's the issue."
At the same time, most workers expect Social Security will be a source of income in retirement, EBRI found, even as the benefits program is set to face a funding shortfall in less than a decade. If Social Security isn't shored up by 2033, retirees could face an across-the-board benefits cut of more than 20%, a worrying issue for workers without much saved for retirement.
Even so, current retirees overall are optimistic about their lives, with EBRI finding that two-thirds said they are living the retirement life they envisioned.
"It's pretty positive overall," Copeland said. "But getting there can be a stressful situation."
- In:
- Social Security
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
TwitterveryGood! (9124)
Related
- Audit: California risked millions in homelessness funds due to poor anti-fraud protections
- Decades after a US butterfly species vanished, a close relative is released to fill gap
- Ex-youth center worker testifies that top bosses would never take kids’ word over staff
- 'Golden Bachelor' star Theresa Nist speaks out after bombshell divorce announcement
- Sam Taylor
- Kesha Switches TikTok Lyric About Sean Diddy Combs During Coachella 2024 Duet
- Trump trial gets underway today as jury selection begins in historic New York case
- 'Jezebel spirit': Pastor kicked off stage at Christian conference in Missouri
- Former Milwaukee hotel workers charged with murder after video shows them holding down Black man
- Revised budget adjustment removes obstacle as Maine lawmakers try to wrap up work
Ranking
- Brianna LaPaglia Reveals The Meaning Behind Her "Chickenfry" Nickname
- Salman Rushdie’s ‘Knife’ is unflinching about his brutal stabbing and uncanny in its vital spirit
- Rust armorer Hannah Gutierrez-Reed sentenced to 18 months in prison over deadly 2021 shooting
- Ohio Uber driver shot and killed by elderly man agitated by scam call: Police
- Illinois Gov. Pritzker calls for sheriff to resign after Sonya Massey shooting
- Billy Joel's 100th residency special on CBS cut during pivotal 'Piano Man' performance
- Feds say Nebraska man defrauded cloud service providers over $3.5 million to mine crypto
- FBI agents board ship responsible for Baltimore bridge collapse as investigation continues
Recommendation
Connie Chiume, Black Panther Actress, Dead at 72: Lupita Nyong'o and More Pay Tribute
Las Vegas lawyer and wife killed amid custody fight for children from prior marriage, family says
Golden Bachelor’s Theresa Nist Responds to “Angry” Fans Over Gerry Turner Divorce
Caitlin Clark, Kamilla Cardoso, WNBA draft prospects visit Empire State Building
Plunge Into These Olympic Artistic Swimmers’ Hair and Makeup Secrets
Why is tax day on April 15? Here's what to know about the history of the day
Model Nina Agdal Is Pregnant, Expecting First Baby With Logan Paul
Fire rages through the 17th-century Old Stock Exchange in Copenhagen, toppling the iconic spire