Retirement is like the "push me pull you" llama from Dr. Doolittle: Retirees are being pushed to work longer and yet in reality many may have to retire earlier than expected.
People are living longer and need more resources than in the past. At the same time, health and other issues often are cutting some people’s work life short.
Many workers have internalized the message that working longer is one way to bridge the gap between retirement needs and resources. Between 1991 and 2014, the percentage of workers indicating that they planned on working past age 65 increased from 11 percent to 33 percent, according to an article published in the Journal of Retirement.
The article, “What Causes Workers to Retire Before They Plan?” looks at the contradictory forces facing near retirees. It was authored by Alicia H. Munnell, director of the Center for Retirement Research at Boston College; Geoffrey T. Sanzenbacher
, associate director of the center; and Matthew S. Rutledge, research economist at the center. The authors’ study included 3,943 participants.
However, working longer does not always work out. In a survey by Health and Retirement Study, a resource for information on aging in America, 37 percent of those working at age 58 retired earlier than they were planning.
The most common reason for retiring earlier than expected is because of changes in health, the authors said. The second most likely cause is involuntary job loss, followed by changes within the family such as a spouse’s unexpected retirement or having an elderly parent move into the house.
Surprisingly, changes in financial wealth do not have a significant impact on the probability of early retirement, according to the article.
The factors prompting people to retire earlier than expected can be used to predict retirement in the future, the authors said.
“Should health improve in the future, then people should be more likely to achieve their retirement goals, ultimately working longer,” they wrote. The increase in job mobility also could reduce early retirements if the movement is toward a better job.
If the economy deteriorates and workers are laid off, early retirements could increase because 66 percent of workers over the age of 58 who are laid off do not find new work, according to the authors.