Money Management

Can Working Longer Help if You Don’t Expect to Be Able to Retire?

By  Opher Ganel

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It’s no secret that despite the large following garnered by the FIRE movement, an acronym for Financial Independence – Retire Early, the retirement reality in the U.S. is dismal.

American workers’ retirement savings lag far behind where they should be to provide a comfortable retirement.

Many who face this situation say they plan to continue working longer, at least part-time. While this is a great way to delay and reduce how much you draw down your nest egg, it’s not a given that you’ll be able to do as you plan.

Here’s why…

Retirement-Age Expectations

According to a 2016 Gallup poll, only 25% of non-retired U.S. workers who were willing to say when they expected to retire said they expect to do so before age 62.

Another 41% expected to retire somewhat early, between the ages of 62 and 67.

The remaining 34% expected to retire later than age 67.

The average expected retirement age stated was 66, up from about 64 in the mid-2000s and from 60 in 1995.

Younger workers estimated a somewhat lower retirement age than their elders. Unsurprisingly, those making a higher income seemed more optimistic than those earning less.

The problem worsens when you consider that the Gallup poll found that retired Americans on average retired at age 61, with 43% of those reporting a retirement age said they retired before age 62. Only 14% reported having retired at age 67 or later.

The 5-year discrepancy in expected vs. actual average retirement age shows that working Americans are likely overestimating how long they’ll be able to keep working. The fact that while only 34% expected to retire early, while 43% actually did so, further emphasizes this disconnect.

Causes for Early Retirement

What drives this disconnect between the expected and actual length of a working career?

It’s a combination of several factors:

  • Health problems
  • Family needs
  • Layoffs and (illegal but hard to prove) age discrimination
  • Lack of sufficient work opportunities in specific fields

Retirement Savings Massively Lag Needs

Unfortunately, the median size of retirement portfolios amassed by Americans approaching retirement age is nowhere near enough to fund a reasonably comfortable retirement. According to a Transamerica Center for Retirement Studies 2015 survey, median retirement savings for Americans in their 60s was just $172,000. Using a conservative 3.5% assumed initial draw, that would provide a long-term contribution toward retirement expenses of just $502/month!

Clearly, despite the fact that over 40% of workers end up retiring early, the median savings amassed toward retirement for even the oldest workers is nowhere near enough to allow financial independence, forcing uncomfortable choices in retirement.

What You Can Do About Your Own Situation

There are several things you can do (and should consider doing) if the above rings true for your situation.

  • Articulate your personal financial goals, including the ability to retire in comfort
  • Quantify how much you need to set aside to accomplish those goals
  • Review your spending to make sure that it aligns with your goals and priorities
  • Modify your spending where it fails to align
  • Find ways to increase your income and/or reduce your costs
    • Move to a different position and/or employer with a higher salary
    • Make yourself (more) indispensable to your supervisor, and parlay that into a raise
    • Start a side hustle
    • If you already have a side hustle, consider scaling it up to a full-time business
    • Reduce your costs by e.g. house-hacking, refinancing a mortgage, etc.

The Bottom Line

If your retirement savings are anything like the sad median of all American workers, you may find yourself forced to continue working past retirement age.

However, health or other factors may prevent you from doing so.

This means you need to take concerted action now to make the most of the time you still have and get on track for a comfortable retirement starting from wherever you already are. The above list offers some ideas to get you started.

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About the Author

Opher Ganel

My career has had many unpredictable twists and turns. A MSc in theoretical physics, PhD in experimental high-energy physics, postdoc in particle detector R&D, research position in experimental cosmic-ray physics (including a couple of visits to Antarctica), a brief stint at a small engineering services company supporting NASA, followed by starting my own small consulting practice supporting NASA projects and programs. Along the way, I started other micro businesses and helped my wife start and grow her own Marriage and Family Therapy practice. Now, I use all these experiences to also offer financial strategy services to help independent professionals achieve their personal and business finance goals.

Connect with me on my own site: and/or follow my Medium publication:

Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.

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