Despite the warnings of the retiring boomer workforce, the 17th annual Retirement Confidence Survey indicates that 24% of workers intend to retire at age 66 or even later.
The survey notes that this mainly includes workers who are not confident about their financial security; those in excellent, very good, or good health; those not expecting benefits from a defined benefit plan; private-sector workers; women; and those with less than $75,000 in household income.
Four in 10 workers say they plan to retire before reaching age 65, with 17% planning to retire before age 60 and 21% planning to retire between the ages of 60 and 64.
Just 27% say they will retire at the “traditional” age of 65.
(This is a variation on our neighbors to the north. A new Fidelity Investments Canada Ltd. study found that the median retirement age in Canada has declined from about 65 in 1979 to 61 today.)
The study also finds that many early retirees who have left the workforce did so due to health problems or disability (28%), changes at their company, such as downsizing or closure (28%), and having to care for a spouse or family member (25%).
Forced Early Retirement
Similar to the Retirement Confidence Survey results, The Fidelity Research Institute’s recently released 2007 Retirement Index showed that 55% of retirees reported leaving the workforce earlier than planned.
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In fact, 22% of retirees were forced to retire early because of poor health or a disability.
Fidelity says this is an important finding since the Index found that 63% of today’s workers plan to work in retirement to supplement their income.
“Americans are relying on their ability to work longer to make up for their savings shortfall; however, the experience of the retirees we surveyed, many of whom had their work years cut short due to health issues, makes that expectation a risk,” said Guy L. Patton, executive director of the Fidelity Research Institute.
Fidelity’s research showed that working Americans have a median of $22,500 in total household retirement savings and anticipate receiving $29,500 in annual Social Security payments.
In addition, 51% of households expect to receive a pension and anticipate median benefits of $18,000 annually.
Fidelity’s research showed that baby boomers had the highest level of readiness, with a median of $45,000 in total household retirement savings.