Retiring at Age 65 May Be Going Extinct

Working Americans expect to retire at an average age of 68—a full decade later than when current retirees left the work force, according to Northwestern Mutual’s “2015 Planning & Progress Study.”

Notably, 62% of working Americans believe they will work past the traditional retirement age of 65 out of necessity, with 79% of this group saying they won’t have saved enough to retire comfortably, and another 79% saying they are not certain that Social Security will take care of their needs. Just over half, 53%, are worried about rising costs like health care.

Many Americans are uncertain about retirement in general, with 43% saying they have not spoken to anyone about retirement and 35% in the dark as to what percentage of their current income they will need when they retire.

Only 12% expect to ever completely retire from the workforce—a dramatic contrast to the 79% of current retirees who do not perform work of any kind. The findings indicate that Americans are developing a very different view of retirement, Northwestern Mutual says.

In addition, working Americans are less optimistic about what life will be like in retirement than current retirees. Only 68% of future retirees expect to be happy in retirement, while 80% of current retirees say they are contented. Only 52% of future retirees expect to maintain their quality of life in retirement, compared with 61% of current retirees who report they have achieved this. And only 54% of future retirees think they will be able to focus on health and fitness, compared with 74% of retirees.

However, among the 38% who expect to continue working by choice, not necessity, enthusiasm abounds. Two-thirds (66%) say they plan on continuing to work because they enjoy it, 60% will work in order to earn additional disposable income, and 49% will keep at their jobs to stay active.

Retirement plan advisers and plan sponsors need to help people prepare for retirement early, says Rebekah Barsch, vice president of planning at Northwestern Mutual: “With life expectancy increasing, planning for retirement is essentially like preparing for a vacation that could last decades. Thinking through all the considerations early on is the best way to help ensure you have everything you need to enjoy your well-earned retirement journey.” (See also: “Bank of America Merrill Lynch Launches Longevity Training.”)

If retirement plan participants are guided on saving adequately and saving early on, they may not have to continue working well past age 65, Barsch says.

The “2015 Planning & Progress Media Study” can be uploaded here.