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Retirement Expectations Gap Widens

Retirement expectations vary by age and income — but not as much as you might think.

Lower-income workers plan to retire a bit later, on average, than those earning $75,000 or more annually. Specifically, those making less than $30,000 annually anticipate retiring at age 70, while those earning between $30,000 and $75,000 are targeting 69, according to a recent Gallup survey.

Young adults, those aged 18 to 29, plan to retire earlier (age 64) than middle-aged (70) and older adults (69), likely reflecting youthful optimism about their future income and savings, according to the report.

These findings are from Gallup’s 2016 Economy and Personal Finance Poll, conducted April 6-10. The average age at which U.S. workers predict they will retire is 66, consistent with the 65 to 67 age range found since the 2007-2009 recession ended. The expected retirement age is up slightly from about 64 years of age spanning 2004 to 2008, and is up from 60 in 1995.

Among current non-retirees:

  • 23% expect to retire before age 62;

  • 38% expect to retire between ages 62 and 67;

  • 31% expect to retire at age 68 or older; and

  • 8% aren’t sure when they will retire.

Reality Versus Expectations

In contrast with current workers’ expectations about retirement, retired Americans report they stopped working at an average 61 years of age, significantly lower than the average 66 years at which today’s nonretired Americans intend to stop working.

More specifically, 42% of retirees say they stopped working before age 62, while just 13% continued working until they were 67 or older. However, the report notes that current retirees span an age range of more than 40 years, meaning that some retired decades ago, while others may have retired the day before they were interviewed, and their age at retirement no doubt reflects societal and economic patterns in force at that time.

This doesn’t tell the entire generational story, as approximately one in seven seniors (defined for this analysis as those aged 67 and older) are still in the workforce — working full time, working part time or unemployed. When these are factored into the equation, 26% of adults 67 and older are either still in the workforce (14%) or worked until they were 67 or older before retiring (12%). That is a bit less than the 31% of today’s nonretirees who intend to work past 67.

However, the greater discrepancy is in the percentage retiring before age 62: 36% of today’s seniors say they did this, while just 23% of current workers intend to.

This gap in expectations and reality concerning retirement among American workers could continue to complicate retirement planning and preparations.