The #1 Reason Americans Choose to Retire Early

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Key Messages

  • The proportion of people aged 55 and over who are retired has risen by two percentage points compared with before the pandemic.
  • Nearly half of Americans (49.9%) expect to retire before they turn 62.
  • There are multiple reasons for this shift to earlier retirement. See below.

Reason’s to Retire

  • One reason for it is that some Americans, particularly the well off are choosing to take it easy- due to the roaring stock market and soaring house prices.
  • For others, falling life expectancy— which decreased by 1.9 years between 2018 and 2020—may have inspired some Americans to make the most of their golden years.
  • Older workers may also be especially nervous about returning to offices, given that they face a higher risk of dying from covid-19 than their younger colleagues.
  • Covid pandemic has caused boomers to re-evaluate their priorities and what they want out of life.

Personal quotes from actual retirees.

  • “I’ve seen so many people who have decided to wait too long to retire — many of my colleagues or older family members — and they get one year of retirement and get sick and pass on,” she said. “I don’t want that.”
  • “Between 60-70 is when I want to travel. After 70, who knows if I’ll be able to.”
  • “Covid made me realize life is too short. I don’t need to work to buy a new car or new clothes. I rather spend the time hiking or in nature.”

Concerns from Retirees

  • Concern that some or all of that wealth could evaporate has especially weighed on entrepreneurs who’ve been through the 2008 Great Recession.
  • Paying for healthcare is another big concern.
  • Running out of money continues to worry retirees given available returns today in the bond market and a big downside risk for the stock market.