The retirement-related expectations of today’s workers and the actual experiences of today’s retirees differ greatly in some important ways. This cautionary tale for anyone planning their retirement is something the Employee Benefit Research Institute has long captured in annual surveys, and its latest report is no exception.

According to the EBRI’s 2021 Retirement Confidence Survey:

  • The median expected retirement age of today’s workers is 65, whereas the median actual age when today’s retirees stopped working is 62
  • 26% of today’s workers expect to retire at age 70 or beyond or not at all, whereas that was the actual experience of just 6% of today’s retirees
  • Just 18% of today’s workers expect to retire before age 60, whereas 34% of today’s retirees stopped working that young

Consistent with past surveys, the latest EBRI study found that 46% of today’s retirees stopped working earlier than expected. While 41% did so for positive reasons (they could afford to retire early), 34% ended their careers because of a hardship or disability unrelated to COVID-19. Another 25% of those who retired earlier than expected said changes at their company prompted their early exit from the workforce.

Here’s one other area of disconnect:

  • 72% of today’s workers expect to generate some income by working in retirement, whereas just 30% of today’s retirees have actually worked for pay in retirement

These findings are important for all who are planning their retirement. On the one hand, there’s much to be said for planning to work past the traditional retirement age of 65. Work is an important source of meaning and connection, and it can help delay taking Social Security until the monthly benefit is at its age-70 peak.

On the other hand, though, building a plan reliant on working that long can create a false sense of security and fool us into thinking we can afford to contribute less to our retirement plans than we really should.

The best approach for many, it seems, is to plan vocationally, spiritually, and emotionally to work at least until age 70, as we plan financially to retire sooner. (MoneyGuide can help you understand the implications of various planned retirement ages.)

How well have you incorporated the possibility of an earlier-than-expected retirement into your plans?