I recently came across an interesting Federal Reserve report called ‘The Economic Well-Being Of US Households’. It’s a 50+ page annual study that explores all aspects of Americans’ financial well-being. The good news is that on almost all measures and for almost all groups of Americans, they are on a better financial footing than almost ever.
In the retirement section, I was struck by a table that showed the ‘Reasons For Retirement’ that they had collected through survey data. They had the results split by age groups, so you could look at ‘Early Retirees’ – those retired at age 61 or younger, and those retired later. I was surprised at how high ‘Health’ and ‘Job Related’ was for this group:
- 55% – Wanted To Do Other Things
- 51% – Wanted To Spend Time With Family
- 40% – Poor Health
- 32% – Family Responsibilities
- 30% – Didn’t Like The Work
- 21% – Forced To Retire / Laid Off
The reasons given are not exclusive to each other. People could retire early for a number of reasons at the same time. Still, ‘Poor Health’ and ‘Laid Off’ represent a huge percent of early retirees. I would guesstimate that they represents close to HALF of early retirees – especially given that some respondents may not want to acknowledge negative circumstances in a survey. (AnUrban Institute study suggested that the number of folks ‘forced’ into retirement rose from 33% in 1998 to 55% in 2014)
I had a few colleagues at MegaCorp that had parents that had suffered in a ‘forced’ retirement and were aggressively pursuing FIRE (financial independence & retiring early) for themselves. Looking at these numbers, it would seem that everyone should expect that these are very real considerations and should be planned / saved for. Clearly, not everyone can plan on reaching the ‘standard’ age 65 retirement.
Are you surprised by how many people are ‘forced’ into retirement?
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