26% Expect to Retire Late
Nearly half of the survey respondents expect to retire between the ages of 60 and 69, which corresponds closely with the actual age people have been retiring. The average retirement age in the U.S. has been 63 in both 2016 in 2015, according to an analysis by financial technology firm SmartAsset.
However, GOBankingRates found that a significant percentage of Americans expect to work past their 60s. According to the survey, 11 percent of workers don't plan to retire until age 70 to 74, and another 15 percent said they won't retire until age 75 or older.
"I don't think most want to work that long, but rather they will have to work that long," said Scott Bishop, executive vice president of financial planning at STA Wealth Management in Houston. In fact, he said he expects more than 26 percent of Americans will have to work until their 70s because they won't be financially prepared to retire sooner.
Indeed, most Americans haven't saved enough for retirement. GOBankingRates' 2017 Retirement Savings survey found that 55 percent of Americans have less than $10,000 in retirement savings.
"I think that many Americans have no savings plan, spend too much — or have spent too much in terms of student loans, mortgage debt and auto debt — and many don't even save in their 401k plans up to the match," Bishop said. "With that in mind, I think it will be very hard to retire when they think. It is like trying to lose weight without having a diet and exercise plan."
Working longer can give you time to catch up on retirement savings and delay the need to start drawing money from your retirement account. However, planning to delay retirement until your 70s could backfire. "My father planned to work until 70," Bishop said. "He had a stroke at 58 and was forced to retire."
Bishop said many Americans aren't in good enough health to let their retirement strategy hinge on working longer. "If you can't guarantee it, how can you plan for it?"
27% Expect to Retire Early
An even greater percentage of those surveyed expect to retire early rather than delay retirement. According to the survey, 16 percent expect to retire between ages 50 and 59. Another 15 percent think they will retire before age 50.
However, Bishop said he thinks fewer than 10 percent of workers will be able to retire before age 60. "Most Americans have little or no savings, and more people are living longer — well into their 90s," Bishop said. "How can anyone other than a very disciplined saver or the financial elite retire before 60?"
You have to be committed to saving your money rather than spending it if you want to retire early. "The key is you have to prioritize freedom and security ahead of lifestyle today," said Todd Tresidder, a retirement coach and the founder of Financial Mentor, a wealth-planning company. "Otherwise, you won't build the assets."
How much you save as a percentage of your income and the return on your investments — minus inflation — will determine when you can afford to retire, said Tresidder, who achieved financial independence at age 35 by saving 70 percent of his income while working full time. "Those two ratios will literally determine your financial outcome in life," he said. "It's just that simple."