While Republicans in Congress discuss raising the retirement age and debate continues over the future of Social Security, a new report reveals that half of American adults ages 61 to 65 have already retired.
The report by The Alliance for Lifetime Income also shows that 28% of those same retirees are still providing financial support to adult-age children and extended family members.
The study, conducted by Artemis Strategy Group from Feb. 15, 2024, to March 2, 2024, surveyed 2,516 consumers ages 45 to 75, of whom 505 were an oversample of “Peak 65” consumers ages 61 to 65.
Fifty-one percent of those Peak 65 respondents are already retired, stopping work at an average age of 57.7, according to the report. According to a 2020 ALI study, 25% of adults in that age group stopped working because of health concerns or dissatisfaction with their employer. Twenty-two percent said they were either forced or incentivized to retire.
“The data consistently demonstrates Americans often retire earlier than they anticipated due to unforeseen circumstances,” ALI CEO Jean Statler said in a statement. “It’s more important than ever that people expect the unexpected when planning for retirement.”
The study also found that respondents feel a wide range of emotions concerning retirement and money. About a third (34%) are worried about their financial situation, while 33 percent say they are confident. In addition, 39% are uncertain about their finances, while 42% are optimistic.
Of those surveyed, 51% have investable household assets of less than $100,000, 25% have assets between $100,000 and $500,000, 13% have assets between $500,000 and $1 million, and 11% of Peak 65 consumers have assets of $1 million or more.
Statler said those who have saved $100,000 or less will almost certainly run out of money in retirement, relying solely on Social Security.
“The problem is people don’t realize that Social Security only covers about 40% of your pre-retirement income, leaving a huge gap,” Statler said. The good news is millions of Peak 65 consumers still have the opportunity to protect themselves from outliving their savings. It’s why educating consumers on how to have a secure retirement is so vitally important.”
Still, 49% of the Peak 65 respondents said they are already claiming Social Security, with two-thirds (66%) of them with investable household assets below $100,000.
The survey found:
- 43% are doing so because of a disability or the inability to work;
- 40% need the money; and
- 30% expressed “fear of missing out,” concerned that Social Security won’t be there in the future, their payment would be cut or that they may die before reaching full retirement age.
“There is real concern that Social Security will not be able to support people who are relying on it as their primary source of retirement income, which is why Congress needs to act now,” said Jason Fichtner, executive director of the Alliance’s Retirement Income Institute, and a former associate commissioner at the Social Security Administration.
This report confirms the findings of an April 2024 study that found two-thirds of the Peak 65 baby boomers will struggle to maintain their lifestyles in retirement and the likelihood of living up to 20 or more years.