Shocking EBRI Study: Why 58% of Retirees Call It Quits Earlier Than Planned!
Thinking about when to retire at a specific age? The journey to that milestone is often paved with careful planning, but what happens when life throws a curveball? A fascinating study reveals that a striking 58% of retirees bid farewell to their careers earlier than anticipated, often due to circumstances that are beyond their control.
The findings from the latest Spending in Retirement study, which surveyed 3,600 retirees between the ages of 62 to 75, delve into the reasons behind this trend and the financial hurdles that accompany it.
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For some, retiring early is a well-considered decision, a reward for years of diligent saving and strategic planning. Yet for many others, early retirement is not a choice but a necessity.
Health challenges and unexpected workplace changes are the top reasons many Americans are retiring sooner than they thought. According to the study’s results:
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38% of early retirees cited health issues or disabilities as their primary reason for leaving the workforce.
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23% reported that corporate downsizing or reorganization forced their hand.
While a significant portion of early retirees—nearly 40%—felt financially ready to make this leap, they are a minority compared to those whose situations dictated a quicker exit.
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However, embracing early retirement often comes with financial challenges. Those who retire early may find themselves in a tight spot, as they have less time to save adequately for retirement, forcing them to stretch their savings over a potentially longer retirement span.
An additional study from John Hancock Financial highlights that early retirees frequently encounter financial stress due to various factors:
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A staggering 33% of early retirees rely solely on Social Security for income, compared to just 11% of those who retired on schedule.
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More than half reported needing to cut back on their spending, while 45% downsized their living situations to make ends meet.
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With increased life expectancy, many must prepare for a retirement that could last for decades, especially if they retire early.
The findings also indicate that many retirees are underprepared for the financial demands of this new chapter. Half of those surveyed admitted they hadn’t saved enough, with only one-third believing they had sufficient funds.
