New Report Reveals 62% Of U.S. Retirees Leave The Workforce Sooner Than Expected – And People Are Not Prepared

A recent report from John Hancock Retirement shares an alarming trend: 62% of U.S. workers are retiring sooner than anticipated. While many dream of retiring early, this trend doesn't align with that dream. Many are pushed unexpectedly into retirement, leading to significant financial challenges. 

This report could be a wake-up call for those nearing retirement or who haven't started preparing yet. 

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The John Hancock Financial Resilience and Longevity Report offers a sobering outline of retirees' finances. People are living longer – often well into their 80s and beyond – so having enough savings to potentially last decades after retirement is more critical than ever. 

The survey found that while Baby Boomers generally have stronger finances, Gen Xers and Millennials struggle. Many are grappling with high debt and insufficient (or any) emergency savings, increasing their risk of financial instability in retirement. 

The Reality of Early Retirement

The reality is that retirement rarely goes according to plan. Most workers have a target age for retirement, but life can get in the way. Health issues, layoffs or caregiving responsibilities can force people to leave their jobs sooner than they'd like. 

The report highlights that almost three-quarters (72%) of early retirees wish they had saved more before leaving the workforce. A gap in savings can lead to a tough adjustment period, during which extreme lifestyle changes may be necessary to make retirement funds last. 

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Financial Resilience is a Must

Financial resilience – the ability to bounce back from financial setbacks – plays a big role in preparing for retirement. According to the report, retirees who worked with financial advisors or created a formal retirement plan felt more secure. Nearly 80% of those with an advisor described their financial situation as "good," compared to just 52% of those without one. 

The survey also noted that many workers feel behind in their retirement savings. Half respondents said they are not on track and only about a third have a comprehensive retirement plan. Even among Baby Boomers, where most feel they are on track, 40% admitted that they still feel behind. 

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Employers and Advisors Play a Role

The John Hancock report emphasizes the importance of support from employers and retirement plan providers. These resources can help employees build a solid financial foundation and understand how to start. Companies can empower their workers by offering financial wellness programs and access to advisors. 

The report found that workers who engage with their retirement plans digitally – whether by logging into their plan's website or reading emails from their providers – reported better financial situations. More than 60% of those who opened six or more emails from their providers said they were in good shape financially. 

Unexpected Things Happen

A critical insight from the report is that many workers expect to be able to work longer to save for retirement. But it's important to recognize that life doesn't always go as planned. It's smart to build a strategy that also includes the possibility of early retirement. 

Rising costs and economic uncertainties make this kind of planning essential. A solid financial plan can help secure the future and ensure a comfortable retirement. 

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