The 4-Year Retirement Gap: Why Most Workers Won't Retire at an Ideal Age of 58
Most workers want to retire early, but there's a disconnect between what they want and what they believe they can achieve.
A recent Kickresume survey found that 54% of workers worldwide want to retire before 60, with 58 as the ideal retirement age. However, only 28% expect to retire by 60, and the average worker expects to retire at age 62.
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The findings reveal a four-year gap between retirement goals and reality. In fact, 57% of workers expect to retire later than they would like, while 10% don't think they'll ever retire.
Here's a closer look at why so many workers expect to delay retirement, and what they can do to close the gap between their ideal retirement age and reality.
Most Workers Expect To Retire Later Than Planned
Many workers aren't optimistic that they will be able to retire when they want to. The survey found that 57% expect to retire later than they'd like, while only 9% think they'll beat their target retirement age.
“Based on the survey’s findings, 62 seems like a more realistic age to retire than 58 for the vast majority — it’s also likely that many will find themselves working longer than this," said Peter Duris, CEO and cofounder of Kickresume.
Women and Older Workers Face the Biggest Retirement Gaps
Certain groups are less confident than others that they'll be able to retire when they want to.
Women want to retire earlier than men but believe they will have to work longer. The survey found that 57% of women want to retire before 60 versus 52% of men, but only 25% expect to actually achieve this compared to 29% of men. The gap between ideal and expected retirement age is 5.6 years for women and 4.1 years for men.
“Women aren't just facing a bigger gap between their ideal and expected retirement age — they're also more likely to say they'll never retire at all: 14%, compared to 7% of men," Duris said.
The survey points to part of the answer: Women save at roughly the same rate as men but invest noticeably less in stocks, ETFs, funds or property.
"Saving alone doesn't grow money the way investing does over several decades, so even matched saving habits can lead to very different outcomes by retirement age," Duris said.
“Across many industries, there’s still a gender pay gap, with the Pew Research Center’s most recent research concluding that on average, women earn 85% of what men make," he continued. "This makes it harder for women to save for retirement. Women are more likely to work part time, often due to caregiving responsibilities, contributing to lower earnings on average."
Older workers are also less confident about their retirement outlook. The survey found that employees ages 41 to 61 are the least confident that they will be able to retire comfortably.
"They're the closest to retirement, with the clearest view of their actual finances — no more guessing, no more hoping the numbers work out," Duris said. "When the people who can see the finish line most clearly are also the most doubtful, that's a strong sign 62 is the honest answer, not 58."
Why Workers Think Retirement Will Take Longer
One reason many workers expect to retire later is that retirement funding has changed dramatically.
Traditionally, U.S. workers relied on a "three-legged stool" to fund retirement, with income coming from Social Security, employer pensions and personal savings. Today, 60% of workers expect to fund retirement with personal savings and investments, while only 24% expect a state pension and 22% an employer pension.
Being more reliant on personal savings could cause many workers to delay retirement, especially since 13% admit they are doing nothing to financially prepare for this phase of life.
"It seems like many people worry that by 60, they simply won’t have saved enough," Duris said.
Another factor may be a broader loss of confidence in retirement readiness. The survey found that 67% of workers believe retiring comfortably will be harder for them than it was for their parents.
"If you already expect the deck to be stacked against you, it makes sense to push your own timeline back rather than bet on hitting an optimistic target," Duris said.
How Workers Can Get Back on Track for Retirement
While funding a comfortable retirement can be challenging, there are steps workers can take now to improve their chances of retiring when they want to.
"Our survey found that a higher salary is what workers say would help most — 25% named it, more than any other answer," Duris said. "That makes sense: saving, investing and contributing to a pension all depend on having disposable income to begin with."
Right now, 47% of workers save regularly, 44% invest and 39% contribute to a pension, but those strategies can be difficult without room in the budget first.
“If you can’t find a higher-paying job right now or get a raise in pay, you could always do what 61% of people are doing and start a side hustle, as one of our previous surveys found," Duris said. "Nine percent of these respondents said they started their side gig to help them save for a financial goal."
For workers hoping to retire sooner, the findings highlight the importance of increasing income, saving consistently and investing for long-term growth. Otherwise, the retirement age they want may remain several years out of reach.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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