As my parents aged, my sister and I talked a lot about where Mom would go when Dad passed away. My sister’s house? My house? Assisted living?
We only discussed Mom because my father would obviously go first. He was not only older, but not nearly as healthy. He was legally blind; Mom had to drive him around and take care of him. It wasn’t a problem; she was healthy, happy and in great shape.
Then one Monday morning, Mom took a nap in her favorite chair, and she didn’t wake up.
We’d never considered that scenario as remotely possible. And that’s the thing about life: Just when you think you’ve got it figured out, you find out you don’t.
As they say, people plan and God laughs.
I’ve talked to a lot of people about their retirement plans over the years. Most tell me they’ll keep working until they hit 65 or 67. Many have a spreadsheet mapping it all out. They figure they’ll max out their Social Security benefits and build a massive portfolio before finally calling it quits.
And often it works out that way. Other times, not so much.
The gap between when we expect to retire and when we actually do is one of the most consistent findings in financial research. If you’re building your entire financial future on the assumption that you’ll work into your late 60s, you need a backup plan.
The numbers don’t lie, and they tell a story you need to hear.
The gap between expectation and reality
There isn’t a single official retirement age tracked by the government, but the major surveys all point to the same truth. According to a Gallup poll on retirement timing, the average age when Americans retire is 61 or 62. Meanwhile, non-retired folks expect to keep working until they’re 66.
That’s a massive disconnect.
The 2025 Retirement Confidence Survey summarized by Kiplinger from the Employee Benefit Research Institute (EBRI) paints a similar picture. Workers reported a median expected retirement age of 65. But when you ask actual retirees, the median age they left the workforce was 62.
Even more telling is what happens at the extremes. In that same EBRI survey, 30% of workers said they expect to retire at 70 or later or simply never stop working. Yet only 9% of actual retirees did that.
Conversely, just 12% of workers plan to retire before 60, but 27% of retirees said that’s exactly what happened to them.
Why we leave the workforce early
You might think retiring early sounds like a dream. For some, it is. The EBRI data shows that among those who retired earlier than planned, 44% did so because they could afford to. That’s the ideal scenario.
But for the rest, early retirement wasn’t a choice. It was forced on them.
Health problems: According to the survey, 31% of early retirees pointed to a health problem or disability as the reason they had to stop working. You can’t plan for a sudden illness, but it happens all the time.
Company changes: Another 31% cited changes at their employer. That means layoffs, downsizing or a business closing its doors. If you lose your job in your early 60s, finding another one that pays the same isn’t easy. Many older workers eventually give up the job hunt and simply declare themselves retired.
This destroys the popular strategy of planning to work a few extra years to make up for a lack of savings. You can’t just assume your employer will keep you around or your body will cooperate.
The myth of working in retirement
Here’s another assumption that gets people in trouble. A massive 75% of workers in the EBRI survey said they plan to work for pay in retirement. They think they’ll pick up a fun part-time job or consult on the side to bring in some extra cash.
The reality? Only 29% of retirees actually do it.
If your financial plan relies on earning a paycheck after you officially retire, you’re taking a massive gamble. When health issues pop up or those part-time jobs don’t materialize, you’ll be left with a serious hole in your budget.
How to protect yourself
The takeaway here isn’t to panic. It’s to be realistic. You need to stress-test your financial plan for an early exit.
1. Save more right now: Don’t assume you have another decade to catch up. Push as much cash into your investment accounts as you can stomach while you’re still earning a steady paycheck.
2. Understand Social Security: You need to know what happens if you’re forced to claim early. Taking benefits at 62 permanently reduces your monthly check compared to waiting until your full retirement age. (You can read more about the impact of claiming early in “4 Dave Ramsey Rules for Claiming Social Security at 62.”)
3. Plan for the health care gap: If you retire at 62, you still have three years before Medicare kicks in at 65. Finding private health insurance to bridge that gap can be brutally expensive, though there are ways to cover health care costs for an early retirement. Factor those costs into your projections.
4. Build flexibility: The people who survive an unexpected early retirement are the ones who didn’t pin all their hopes on a single target date. Keep your debts low and your options open.
