According to a recent study conducted by the Employee Benefit Research Institute (EBRI), American workers are retiring at a median age of 62, three years earlier than their anticipated retirement age. These findings highlight the disparity between retirement goals and the reality faced by many individuals.

The notion of working longer to secure a more financially stable retirement has gained popularity among lawmakers and business leaders. However, the study reveals that many seniors are being forced into retirement earlier than planned, even when they wish to continue working. Craig Copeland, Director of Wealth Benefits Research at EBRI, emphasized that it is unrealistic to expect everyone to work longer as a solution to retirement challenges, as many individuals simply cannot do so.

The report found that seven out of ten retirees stopped working before the age of 65, with a significant portion citing factors beyond their control. Approximately one-third of respondents attributed their early retirement to health issues or disabilities. Surprisingly, only about 40% of participants stated that they retired early because they could afford to do so.

The consequences of this gap between expectations and reality are concerning. Individuals who intended to retire at 65 but were forced to do so earlier may not have saved enough money to sustain themselves in retirement. A separate study by AARP discovered that one in five Americans over the age of 50 has no retirement savings at all.

The EBRI study also revealed that only half of workers have calculated the amount of money they will need for retirement. Among those who have assessed their financial retirement goals, about a third believe they will require at least $1.5 million. This aligns with previous research that suggests the average worker believes they will need $1.46 million for a comfortable retirement. However, the reality is far different, with approximately one-third of workers currently having less than $50,000 in savings and investments.

Craig Copeland noted that individuals may be basing their retirement savings goals on the rule of thumb that recommends having around 10 times one's salary saved for retirement. As a result, the figure of $1.5 million seems attainable, but the issue lies in the unrealistic expectations regarding the necessary savings to achieve that number.

Despite these financial challenges, most workers still expect Social Security to provide income during retirement, even though the program faces a funding shortfall within the next decade. If not addressed by 2033, retirees could face over a 20% reduction in benefits, posing a significant concern for those without substantial retirement savings.

Despite the obstacles faced, current retirees expressed overall optimism about their retirement lives, with two-thirds stating that they are living the life they envisioned. Nevertheless, Copeland highlighted the stress associated with reaching retirement goals.

These findings shed light on the financial struggles faced by American workers and the need for more realistic retirement planning. With a significant number of individuals retiring earlier than expected, it is crucial to address the gaps in retirement savings and ensure that workers are better prepared for their golden years.