Americans' target retirement ages are moving younger.

For the estimated 11.5 million households with millennial and Gen X breadwinners, the ideal retirement age is 55, according to a report by research and benchmarking firm Hearts & Wallets.

But while this “Aspire to Retire by 55” segment has high hopes, their savings rate and other financial behaviors suggest an early retirement goal is unrealistic without behavioral change, education and financial advice, according to the report, "The Retirement & Funding: Ideas for Enhancing Advice as Income Sources Evolve and Target Dates Move Younger." 

These younger households are more likely to have lower student debt than those who are targeting older retirement ages, the report found. They spend less on housing; in fact, more than half (53%) spend less than 40% of total spending on housing and utilities. They also have higher rates of owning investment products, including products oriented to income like CDs, high-yield savings, bonds and annuities, as well as equities.

Although more households aspiring to retire at 55 are at higher asset levels than households who anticipate working longer, the report found that most have not yet reached $100,000 in investable assets. Only about 18% of these households save 15% or more of their income of income, another 15% are not saving and about a third (37%) save between 1% and 7% of their income, whichis likely not enough to achieve an early retirement, according to the report.

The report also found that one-in-five of these households fail to engage in key savings behaviors. For example, only half of the retire-by-55 segment indicated that they owned a home. Moreover, half of this segment said they have retirement savings plans and contribute to them regularly, while 26% responded that they didn't. Only about half of these respondnets, 47% said they generally spend less than they make.

The research also found that the “Aspire to Retire by 55” group is more risk tolerant and less “inexperienced” with investing and are also slightly more likely to have the potential for pension income. They also tend to be more open to advice and product innovation and they place higher importance on a firm that is a “well-known leader.”

Compared to older generations, millennials and Gen Xers have had fewer barriers to investing, according to the report, with lower trading costs and innovations to make financial products and advice more engaging.

Laura Varas, CEO and founder of Hearts & Wallets, said that the pandemic has inspired renewed appreciation for building financial security and planning for retirement. “Firms should assist consumers in understanding their personal work viability and provide support to achieve retirement goals without making assumptions about target dates, either earlier or later than the traditional mid-60s,” she said in a statement.

Hearts & Wallets' research was fielded in August 2020 and included 5,920 U.S. households.