75% of Early Retirees Have Savings Regrets

Americans are living longer—and in some cases, retiring earlier—making it a challenge to stretch out the quality of one’s golden years along with money to fund them.

Among retirees, 52% stopped working sooner than they had planned—at an average age of 56, according to Manulife John Hancock Retirement’s 11th “Financial Resilience and Longevity Report,” released Tuesday. Nearly 70% of those who retired early said they did so due to personal or family illness, while only 8% said they retired sooner because they saved enough money.

“People are living longer than ever, and there’s an opportunity and increased need to provide support to plan participants in preparing for a longer retirement,” said Aimee DeCamillo, global head of retirement and wealth at Manulife Wealth & Asset Management, Manulife John Hancock’s parent company, in a statement. “Our mission is clear: give employers and advisors the capabilities to help plan participants save earlier, invest smarter and retire on their terms with security and dignity.”

The Importance of Readiness

Workers may not be ready for retirement, regardless of their timing. In October, John Hancock Life Insurance Co. and the Massachusetts Institute of Technology AgeLab published a Longevity Preparedness Index, which found that U.S. adults scored an average of 60 out of 100, falling short of passing marks in all eight critical areas of readiness for older age. The LPI measures whether respondents had established healthy habits and long-term planning in the areas of care, community, daily activities, finance, health, home, life transitions and social connection.

According to the “Financial Resilience and Longevity Report,” expected retirement delays (32%) have risen eight percentage points since 2021 (24%)—yet they remain better than in 2015 (43%). Of those who reported retiring later than planned, 36% said they did so to save money.

The report also found adequate preparation can make retirement less stressful than it could be: 45% of early retirees said they were more financially stressed in retirement compared with when they were working. Only 23% of on-time-or-later retirees said the same.

Preparedness can reduce regret, as well, the study indicated: 75% of those who retired earlier than expected said they regretted not saving more for retirement. On-time retirees expressed regret at a far lower rate (57%).

In addition, 46% of individuals who retired earlier than they planned reported having a formal plan before retiring. For those retiring on time or later, nearly three-quarters (72%) reported having a formal retirement plan.

Becoming a Planning Partner

Employers may be well-positioned to partner with their employees on creating retirement plans, according to the research. Nearly half (48%) of survey respondents said their employer has some influence on their financial decisionmaking.

The research suggested employers should help combat financial stress—what Manulife John Hancock called a “workplace disruptor.” On average, employees spend 4.6 hours at work on their finances each month, and 33% said they would be more productive without their current financial worries, according to the report. In addition, 16% of respondents said they have missed at least one day of work in the past six months due to financial stress—a 4% uptick since 2021.

Survey respondents indicated that the areas of employer support in which they were most interested were recommendations on Social Security claiming strategies (63%), help with forecasting retirement income (62%), ability to assess financial wellness and identify gaps (61%), access to a certified financial adviser (59%) and access to expertise on wills and estate planning (59%).

Among other recommendations, Manulife John Hancock recommended plan sponsors create interactive experiences that visualize potential outcomes and demonstrate the impact early financial decisions can have; replace general retirement sessions with demographic-specific small group meetings; and share personal stories through video testimonials.

Edelman Public Relations Worldwide Canada Inc. conducted an online survey of 2,434 Manulife John Hancock plan participants from May 9 through June 2.