Americans envision working well into their 60s before retiring, but reality can look much different.
Folks today anticipate they will retire at 66, according to Gallup's annual Economy and Personal Finance survey, up from 60 in 1995. The trouble with that is the average retirement age is currently 61.
This has been an ongoing disconnect with the organization finding over the years that retirees' reported retirement age has been about five years younger than non-retirees' expected retirement age.
It also underscores the challenge in planning for a retirement that may come sooner than expected, whether wanted or not.
“Many people develop health problems as they age that force them to retire early,” Richard Johnson, director of the Program on Retirement Policy at the Urban Institute, told Yahoo Money. “And others find that their employers no longer want them.”
Roadblocks to staying on the job at older ages
One explanation for that gap between "hope to" and reality is human nature and perhaps a dollop of optimism. Simply put, life gets in the way.
Of the nearly half of retirees who retired earlier than they expected in the latest annual survey by the Employee Benefit Research Institute (EBRI) and Greenwald Research, two-thirds report their early retirement was for a reason out of their control.
The harsh reality is that people tend to step out of the workforce earlier than planned due to a health issue, or caring for an aging relative or partner takes precedence. Then too, ageism is alive and well in the workplace and older workers often find themselves phased out or pushed into retirement by their employer.
“Many employers seem reluctant to hire older workers, either because they fear that older workers are too expensive, lack the right mix of skills, especially with regards to technology, or will retire soon and thus are not worth the expense of recruiting, hiring, and training,” Johnson said. “So many older people who become unemployed never find work.”
Workplace changes emerging from the pandemic
The acceptance of remote work can help mitigate some of these early retirements stemming from health or mobility issues for some people. One of the major trends emerging from the pandemic is that the genie is out of the bottle when it comes to remote work arrangements. Employers have found that remote workers are productive and performance is not impacted.
And that’s a game changer for older workers. The ability to work without navigating a commute, or dealing with a workplace that is not ergonomically set up, gives workers with health concerns, or caregiving duties, flexibility and the opportunity to stay on the job longer.
The shift to contract or short-term projects, another trend that lit up during the pandemic, can also help someone stay on the job longer, or keep current work experience on their résumé while they push for a full-time position.
The beauty of it is that a full-time position might just come to pass with that very contract employer. Employers are more willing to risk hiring someone over 50 after they've had a chance to work with them and figure out if they “fit in” with the troops and so on.
Contract positions can also keep someone in the workforce in the self-employed realm as they piece together a quilt of jobs to create a viable income stream. In fact, the number of self-employed workers has risen from around 8.2 million in the spring of 2020 to 9.7 million in July of this year, according to the Bureau of Labor Statistics.
It’s not an all or nothing issue when it comes to retirement ages.
“Many older adults need to keep working to pay their bills and many choose to work because they enjoy it,” Ramona Schindelheim, WorkingNation editor-in-chief, told Yahoo Money. “For many older workers, it can be a combination of both. Unfortunately, many face some major roadblocks in their pursuit of meaningful, well-paying jobs.”
Kerry is a Senior Columnist and Senior Reporter at Yahoo Money. Follow her on Twitter @kerryhannon