Plans to Work Longer Often Fall Short

According to the 2013 Survey of the Risks and Process of Retirement from the Society of Actuaries (SOA), preretirees expect to retire at a median age of 65, whereas retirees actually stop working at a current median age of 58.

In fact, thirty-eight percent of preretirees reached for the survey expect to retire by ages 65 to 67, plus an additional 30% who either expect to retire after age 68 or not at all.

That’s compared to nearly 54% of retired survey respondents who reported leaving the work force before age 59—including 30% who retired before 55.

Other results in the survey show preretirees are more likely to say they will work in retirement than retirees actually do. Forty-one percent of preretirees plan to stop working for pay all at once, compared with 78% of retirees who stopped working completely upon retirement. The same goes for preretirees predicting they will do more financial planning than their older counterparts actually accomplish before retiring.

Such a disparity, researchers argue, shows that many preretirees’ plans to work longer will not pan out, further increasing the need for sound financial advice and education among aging preretirees.

One encouraging result from the survey shows both retirees and preretirees plan to reduce spending, increase savings and reduce debt to manage retirement risks.

More than 90% of both preretirees and retirees plan to eliminate all of their consumer debt, and a strong majority of preretirees (88%) plan to cut back on spending to manage risks.

Both retirees and preretirees have a median planning horizon of 10 years. Around 45% of preretirees think it is “very possible” to plan for day-to-day expenses, though they are less likely to plan for other issues in retirements.