Why Planning Retirement Around Extended Work Years Could Harm Your Health and Job Security

Key Takeaways Most Americans retire earlier than expected , with health issues and job loss being the main drivers of unplanned early exits. Experts recommend that people in their 40s and 50s plan by looking at best and worst case retirement scenarios and consider whether they can continue to work in their current jobs. Catch-up contributions to 401(k)s and IRAs can help boost savings, but planning on working longer is a risky retirement strategy given that many people retire before age 65 . You're fast approaching retirement, but don't have enough money to comfortably retire just yet. Instead of stashing more money in your 401(k) , what if you just worked longer, delaying retirement until you saved enough ? Delmaine Donson/ Getty Images While this may seem like a good idea in theory, in practice it might not work out. We connected with policy experts to understand at what age people are retiring and why working forever won't solve your retirement woes . When Are People Actually Retiring? Most Americans retire before they reach full retirement age (FRA) for Social Security, which is age 67 for those born in 1960 or later. "If you look at men, probably about half of people make it to age 65 today," said Geoffrey Sanzenbacher, Professor of the Practice at Boston College. "For women, those numbers are a little bit lower... So we're talking [about] less than half [of women] making it to age 65." In 2024, the average retirement age was 64.6 and 62.6 for men and women, respectively, according to data from the Center for Retirement Research at Boston College. Most Retirees Don't Plan To Leave The Workforce Early So why are people leaving the workforce early ? For many people, it may not be a choice. "The biggest reason that people retire before they really want to is health ... their health deteriorates in some way," said Sanzenbacher. "Another reason is they lose their job non-voluntarily." In a Transamerica Center for Retirement Studies survey of more than 2,400 retirees, nearly six in 10 said they retired earlier than planned, with nearly half of that group reporting that they left due to health reasons. "In this day and age where, for most people in the workforce, the full Social Security retirement age is 67, to cut off that last five years of savings [where] your savings compound and grow, it's a big setback," said Catherine Collinson, President of Transamerica Center for Retirement Studies. Although there are many retirees who retire at or after FRA (according to Sanzenbacher, 40% of men retire at age 67 or later), pre-retirees shouldn't necessarily bank on working longer to fix their retirement savings shortfall . Instead of Planning to Work Longer, Consider Taking These Steps Now Policy experts recommend that pre-retirees start planning for retirement well before they're in their 60s. Collinson advises people in their 40s and 50s to take a closer look at their finances now, planning for potential best and worst-case scenarios . "Look...

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