According to a press release from Sun Life Financial, its survey found 22% of retirees were forced into retirement before they had planned, on average approximately eight years earlier than expected. In addition, the average respondent planned on accumulating approximately $1 million in retirement savings, but had accumulated only about half that amount when they were forced to retire. Fifty-five percent of survey respondents said they were ineligible for Social Security benefits at the time of involuntary retirement.
Additionally, 69% of respondents said their retirement plans overall had been affected by involuntary retirement, requiring them to reduce expenses or change their lifestyles, the release said. Lifestyle and financial adjustments respondents said they made to address their unexpected retirement included:
- reducing expenses (61%),
- fewer vacations and social activities (47%),
- collecting social security before they wanted to (43%), and
- using money from a 401(k) or IRA (30%).
Health care expenses for themselves and/or their spouses was the most urgent financial obligation to be addressed beyond living expenses, cited by 53% of respondents age 65 and older.
Reasons for forced retirement most commonly cited by respondents included layoffs/downsizing (44%), personal illness (32%), and injury (14%). A higher percentage of women cited family obligations (10%) as a retirement cause compared to men (2%). Respondents age 65 and older were more likely to cite layoffs/downsizing (58%) as the primary reason for having to retire earlier than planned, while respondents under age 55 were more likely to name personal illness (46%) or injury (26%).
The survey was conducted online within the US from May 16 to May 30, 2006 among 701 adults (aged 18+) who had experienced involuntary retirement, were responsible for, or shared in, the household’s financial decisions, and were currently working with a financial adviser.