Working Americans expect to retire at age 66, up from 63 in 2002, according to a 2018 Gallup poll. But most retirees don't stay on the job nearly that long.

A plan to work longer isn't the same as being able to remain on the job into your mid- or late 60s. The average retirement age has been 61 since 2011, Gallup found. Before that, the average retirement age in the U.S. hovered around 60 from 2004 to 2010.

"The lower actual age could be based on positive developments – that people end up having more money and more wherewithal to retire than they expected, or negative developments – that people are laid off, lose their jobs or have worse health than anticipated," says Frank Newport, a Gallup senior scientist and former editor-in-chief of Gallup poll.

A Gap Between Retirement Expectations and Reality

Other surveys have similarly found a significant gap between the age workers anticipate retiring and when they actually leave their jobs. A 2018 Employee Benefit Research Institute survey reports that 48 percent of workers expect to retire after age 65, but only 19 percent of retirees stayed on the job that long. Just 10 percent of workers say they are planning to retire before age 60, but 26 percent of retirees left the workforce that early. The median retirement age in the survey was 62.



Unexpected Early Retirement

Many early retirements are unexpected and due to unforeseen circumstances. About half (48 percent) of retirees say they left the workforce earlier than planned, often to cope with a health problem or disability or to care for a spouse or other family member, EBRI found. Other retirees are forced out of their jobs due to changes at their company, such as a downsizing or closure, new skills required for the job or other work-related reasons. "Poor health, caregiving requirements and stalled career progress or layoffs are common reasons people leave the workforce earlier than expected," says Lori Lucas, president and CEO of the Employee Benefit Research Institute. There are also some fortunate retirees who are able to retire early because they can afford it or want to do something else, perhaps due to an inheritance, unexpected windfall or diligent saving.

Coping With an Unplanned Retirement

An unplanned retirement generally means you need to regroup and make the best of the resources you have. You'll need to look at your severance package and ability to collect unemployment if you are laid off. If you're age 65 or older you will probably qualify for health insurance through Medicare, but younger retirees need to find a new health insurance plan or pay for often expensive COBRA coverage. "The early retiree will probably be spending more for health insurance," says Joseph Kuo, a certified financial planner for Abundance Wealth Planning in Newark, California. "They need to pay this out-of-pocket until they qualify for Medicare at 65. Hopefully, they can qualify as a dependent of someone else still working. Otherwise, they'll need to sign up for COBRA or ACA within the enrollment window." Those age 62 and older have the option to start collecting Social Security payments, but your monthly payment is reduced if you claim benefits before your full retirement age, which is typically 66 or 67.

An emergency fund is likely to be extremely helpful to people who find themselves retiring ahead of schedule. "It's important to have three to six months of emergency cash saved," Kuo says. "If the retiree was laid-off, they may need three to six months to find a new job. If there's a health issue, the retiree will need time to recover, get acclimated or get through the waiting period to start collecting disability insurance."

Some retirees are able to transition into a part-time job, which can help cover immediate bills as you regroup for the future. "If you are faced with an early retirement, decide if you need to be completely retired," says Steve Zakelj, a certified financial planner and founder of Flatirons Wealth Management in Boulder, Colorado. "Increasingly, I see clients planning on and/or taking part-time retirement jobs. Not only does it continue to give them a sense of purpose and personal fulfillment, the extra income, even if it's a fraction of what they once made, really helps."

Unable to Delay Retirement