Retirees shouldn’t count on working longer as a ‘strategy,’ data suggests

A chief concern among American workers right now is living longer than their financial resources, and one way seniors try to avoid that is by working longer.

However, data from multiple sources helps illustrate why a plan like that could present unforeseen challenges in later life. This is according to data from Gallup, the Employee Benefit Research Institute (EBRI) and Prudential Financial presented in a story published by CNBC.

Gallup data from mid-2022 indicates that the traditional retirement age is not often the actual retirement age for many Americans. There has been a relatively consistent gap of about five years between the expected and average actual retirement ages, and actual retirement age primarily tends to be sooner than the expected age.

EBRI data also indicates that as many as a third of surveyed workers expect to work at least until age 70 or later, if they plan on retiring at all. But early retirements when they happen are often influenced by unforeseen problems that could include health developments or disabilities.

Thirty-five percent of EBRI respondents who said they retired before they planned “did so because of a hardship like a health problem or disability,” the CNBC story said. “Another 31% did so due to changes at their company.”

Job losses can also have dramatic effects on older workers, with 56% of workers at or over the age of 50 reporting that they were laid off before they were ready to retire according to 2018 data from the Urban Institute.

The current strength of the labor market may make it easier for older workers to find some kind of employment, but it is not known how long such conditions will last according to Richard Johnson, an Urban Institute senior fellow who spoke to CNBC.

Article by Chris Clow on reversemortgagedaily.com

 

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