What's a Realistic Retirement Age?

By Walter Updegrave

"What's a realistic retirement age? How much longer will most of us have to work?" -- Charles Maimone, Wilmington, N.C.

The answer depends on how successful you've been at saving, how cushy a lifestyle you would like to have and, of course, when you prefer to disengage.

That said, after the battering 401(k)s took during the financial crisis, a lot of people feel they'll have to stay on the job beyond the traditional age of 65.

In a recent Wells Fargo survey, 12% of affluent Americans estimated that they'd have to work until age 80 to live comfortably in retirement. Okay, that's extreme. But when SunAmerica Financial Group surveyed pre-retirees last year, it found that workers were expecting to exit at 69 on average, up five years from a decade earlier.

The Upside to Waiting

There's no doubt that if you've fallen behind in your retirement planning, staying in the workforce longer can dramatically improve your chances of achieving a secure post-career life.

You'll have more years to contribute to your retirement accounts, and your investments have more time to grow. And the combination of extending your career and postponing Social Security can often boost the size of your benefit by 8% or more for each additional year you toil. Every extra year you work is also one fewer that your savings will have to support. That alone reduces the chances that your savings will run out.

Those are just the financial benefits: Research shows that as long as you're not slogging away at a job you abhor, working can improve your physical and psychological well-being and keep you more socially engaged.

The Choice Isn't Yours

As helpful as postponing your exit can be, relying on a longer stint at work to improve your retirement prospects can backfire. Why? Just because you want to stay on the job doesn't mean you'll be able to.

A survey last year by the Society of Actuaries shows a big disconnect: While only 37% of workers said they expect to retire before age 65, more than 80% of current retirees left their jobs before that age. Undoubtedly, some got out early because they had the financial wherewithal to do so. But according to the Employee Benefit Research Institute's 2012 Retirement Confidence Survey, about half of retirees leave the workforce earlier than planned. Top reasons: health problems, being forced out of a job, or having to care for a spouse or other family member.

Similarly, even though polls report that 70% to 80% of preretirees plan to include part-time or some other type of work in their retirement routine, EBRI found that only 27% of current retirees have done so. Future retirees may buck the trend -- or find that landing a job isn't so easy.

Have a Backup Plan

When you base your planning around the premise that you'll have lots of time on the job and those extra work years don't materialize, you could find yourself with a nest egg that's too small to support you -- and very few options for growing it.

I think the smarter strategy is to set a reasonable retirement age -- say, 65 or your age for collecting full Social Security benefits (66 to 67 these days) -- understanding that you may not hit it exactly. Then periodically check your progress using an online tool like the T.Rowe Price Retirement Income Calculator.

You can move up that goal if you're doing well. But if within 10 to 15 years of your planned exit you find you're behind, ratchet up retirement contributions as much as possible. As the graphic shows, that may not improve your prospects quite as much as working a few more years, but it'll leave you in much better shape should you find yourself unable or unwilling to stay on the job.

If waiting turns out to be your only option, fine. You do what you have to do. Retirement life will be a lot more enjoyable, however, if working longer is something you do because you want to, not because you have no choice.

More from CNNMoney:

Increase your money and finance knowledge from home

Managing your Portfolio

Keeping your portfolio and financial life fit!

View Course »

Economics 101

Intro to economics. But fun.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

It is a shame what our Political and Financial Sectors have allowed to happen to our Country. Most of them did it unknowingly simply from ignorance of their Human Rights and Identity. Others from a mistaken Philosophy that says our creations and the currency we use to trade them with, are more valuable than Us, their Creators

May 30 2012 at 7:30 PM Report abuse rate up rate down Reply

If you have worked for 40 years and don't have enough to retire on it is your fault. Liberals want to blame everyone else but it is your fault. In 1969 I knew SS was nothing but a fund for the government. President Johnson had just taken it out of the trust and put it in the general fund and replaced the money with treasury bills. I decided to pay myself the same rate as SS in a Whole life insurance policy with yearly premiums and dividends. I bought gold. On both investments I was told "you are stupid". Well today I'm not so stupid. My whole retirement fund is tax free and I problably won't take SS until I have to at 70. I will retire when I stop having fun at my job at the steel mill.

May 30 2012 at 6:27 PM Report abuse rate up rate down Reply

I retired at 60 and will never work again!

May 30 2012 at 6:11 PM Report abuse rate up rate down Reply
1 reply to urbansecond's comment

what are you paying for health insurance ?

May 30 2012 at 6:40 PM Report abuse rate up rate down Reply

Great advice.....just make sure you don't die on the job. You will miss all your retirement fun!!!!

May 30 2012 at 5:08 PM Report abuse rate up rate down Reply

I started planning for retirement at age 20, bought my own home at 23 and never looked back. I pursued my dream career and loved every minute of my working life. There were rough times, sure. But thats where the early planning got me through. So many of my generation find it easy to lay blame on those "evil" guys in the financial world for their failures. Well I'm here to tell ya, piss poor planning (or no planning) results in piss poor performance. Social Security was not designed as a retirement pension. It was a temp safety net program for seniors that is now asked to do too much with too little and too few people supporting it. I spend a lot of time now teaching the newest generation how to think and do for themselves. Their parents have failed them in so many cases trying to be buddies instead of parents. If there is one thing these kids need to learn its that NO ONE is going to take care of them but them. Especially the government...and more to the point, why would you want them too.

May 30 2012 at 4:28 AM Report abuse -1 rate up rate down Reply
2 replies to lamib6297's comment

seems you got to keep your job and it wasnt sent oversea great for you

May 30 2012 at 6:30 AM Report abuse rate up rate down Reply
1 reply to thepetermedic's comment

You condemn lami for not being sent overseas? I don't get it. If you are in the service, you can not have a business unless you have a trusted and secure group to keep things going when you are gone. Please enlighten me.

May 30 2012 at 3:38 PM Report abuse -1 rate up rate down

Nice words but incorrect. SS was created to be a pension for seniors as in the 1940s and 1950s a whopping income of a grand or two a year income wasn't going to give them enough to save for the cushy retirement you think they should have been able to achieve. I too started saving at 26, when I got out of the military where I left after 6 1/2 years at a whopping $1200 a month income. I did what the experts told me to do, I put 10% of my income in the market for the first 10 years and have contributed 17% for the past 25 years and have a huge $400,000 in my 401k. Not quite enough to buy that condo in Aspen and still eat. I can retire and live but I can't retire and live like I do now. Had the market not tanked in 2000 and take 35% of my savings (which the corporations and wealthy just sucked up) and then tanked again in 2008 (which the oil companies and the wealthy sucked up) I might actually have more than I personally put in savings. I know for the past 11 years I have put in over 150k of my own money and my company has put in about 70k. If I had put that money under my mattress I would have more than putting it in the market. So doing the right thing and playing by the rules only makes the rich Republicans and Oil Companies and Corporations that move US jobs overseas better off.

May 30 2012 at 8:08 PM Report abuse rate up rate down Reply

I retired at 52, I am a drop out from HS and did alright for myself . Didnt listen to the BS but used my own GOD given abilities. You people on the other hand that intend to work until your 80 will have enough to go into a nursing home if you make it. Remember the clock keeps ticking and we do not live forever. Good luck

May 29 2012 at 11:38 PM Report abuse rate up rate down Reply

Retirement has been stolen from my generation by the banksters & solcialists. It will be IMPOSSIBLE to ever stop working due to the planned inflation caused by the corrupt politicians & financial cartels in place now. (Trust me, I am a degreed Economics Major.) Only the "public servents" & theives will ever get to relax...time for a NEW system! Take the pensions away from ALL public workers, and watch everything get fixed FAST!

May 29 2012 at 11:33 PM Report abuse +3 rate up rate down Reply
1 reply to dfgivens's comment

I'm sorry, but I'm living proof that you're incorrect.

May 30 2012 at 4:59 PM Report abuse -2 rate up rate down Reply

Retire when you need to do so. Everone case is different. Your financal Portfolio ahd max benifits are not the only considerations,

May 29 2012 at 11:31 PM Report abuse rate up rate down Reply


May 29 2012 at 11:03 PM Report abuse rate up rate down Reply

The best retirement plan is a paid for home, even if you have to move to another part of the country.

May 29 2012 at 10:54 PM Report abuse rate up rate down Reply
1 reply to dedndogyrs's comment

Rental properties are also great. I retired at 55. I have many properties that keep me in a great financial position. All paid off in less than 15 years. I ate a lot of peanut butter and rice, but it was all worth it in the long run. I also started 4 businesses and sold them after they had a financial portfolio. All while raising 2 of my own kids and fostering 4 others alone. It was never easy. It took working day and night. No vacations, no dining out, no new cars and no fooling around. The kids got necessities, nothing that was not. All of us are doing very well now. We are a spoiled bunch now because of wise choices when they counted.

May 30 2012 at 3:51 PM Report abuse rate up rate down Reply
1 reply to isawondfl's comment

Yep, i did the same thing in about the exact same time period. I can retire off the psoitive cash flows of the rentals alone, no need for SS, my 401, IRA, (all of which has performed poor compared to the the rentals) etc or even ever a need to sell any of the rentals. Now the fun starts. I could not imagine retiring past your late 50's.

May 30 2012 at 9:40 PM Report abuse rate up rate down