When You Don't Pick Your Retirement Date

When You Don't Pick Your Retirement Date

Workers plan on 66. Retirees left at 61. Almost half of retirements start earlier than planned, and mostly not by choice.

Walk into any social gathering where gray hair outnumbers the rest, and retirement, when to retire, where to retire, are always hot topics. In most conversations, you hear people are planning to work through their mid-60s. And the answer has not changed in decades, and if anything, has drifted up by a few years. On average, people now expect to work until they are 66 years old.

Looking at the data, the actual retirement age is closer to 61, and this is the number Gallup has tracked for more than 20 years. How can we explain a five-year gap between when most were planning to retire and when they actually end up retiring?

The gap between when people were planning to retire and when they actually did is real. In this year's Retirement Confidence Survey from the Employee Benefit Research Institute, 46% of retirees said they retired earlier than they had planned. The trend shows the number of people who are retiring earlier is growing. And the reason is not typically because they achieved financial freedom sooner. For 76% of those who retired earlier than planned, the decision was outside their control. Health problems, losing a job in their late 50s, early 60s, and a difficult job market for older applicants, and the need to care for a loved one, were some of the reasons that forced people into early retirement.

We have talked about retirement as something you plan for, published our own calculator so you can decide when you are ready to retire based on how much you want to spend in retirement. But the reality of retirement is that for nearly half of Americans, retirement is an event we do not control. And sometimes it arrives when we least expect it or are least ready for it.

Losing a job later in life can be especially difficult to overcome. The Urban Institute and ProPublica followed workers with stable jobs in their early fifties. More than half experienced layoffs for various reasons. Many had difficulties finding a new job that got them their old paycheck, with the typical household's income falling by almost half.

The older you get, the smaller the chance of finding a job after a layoff. If you lose a job when you are in your sixties, you may never find a decent-paying job relevant to your experience. This is the difficult reality many don't want to talk about publicly, some out of shame. Ask around at the gathering, and someone might whisper, I did not retire. I just never got hired again.

Even when your employer keeps you on the payroll and you are an essential member of the team, there is another factor that can change your plans. And that is your body. Researchers at Boston College put the odds of developing a work-limiting health problem in your early fifties at about one in seven for men and one in six for women. And the older you get, the odds of developing a health issue that can end or severely limit your employment increase. A health setback in your fifties could be especially devastating if your retirement plan relies heavily on these years to build your retirement nest egg.

There are countless examples of people whose retirement plan was written for them. Pat Summitt had spent thirty-eight years coaching Tennessee and won more college basketball games than any coach before her. At fifty-nine, she was diagnosed with early-onset Alzheimer's and had to step down the following season.

Marjorie Madfis was a digital marketing strategist at IBM. After seventeen years, IBM laid off seven of the nine people on her team, all women in their forties and fifties, while keeping younger team members, despite her protest. IBM never provided any reason. She never worked in tech again.

Jean Potter spent most of her career at BellSouth, working her way up from the operator's desk to climbing poles to technical troubleshooting. After twenty-seven years, and at fifty-five, she was pushed into early retirement by the company after receiving her layoff notice.

A championship coach, an IBM strategist, a phone-company lifer, all were forced into "early retirement" years before they planned to. That is how the story goes for nearly half of us.

Being forced into retirement in your fifties can be very challenging. You are still years away from receiving Social Security and Medicare. The years between forced retirement and eligibility for Social Security and Medicare, called the bridge years, can deplete a sizable part of your retirement nest egg. Keeping your old health plan alone through COBRA costs a family about $2,300 a month. Every dollar taken from your retirement savings is a dollar that is no longer invested and generating money for your retirement, compounding the problem.

There are no insurance policies you can buy against being forced into retirement. Disability coverage and severance can soften pieces of it, but nothing covers the whole thing. The only one that exists is the one you build yourself by saving quietly to achieve financial independence. The goal of financial independence is not to stop working and chill at the beach all day. Every dollar saved gets you closer to achieving independence. It is the insurance you need to protect yourself if you are forced into retirement.

A retirement plan is not finished until it has an answer for arriving early.

If you have already been forced into early retirement, most likely it was not your doing. No plan argues with a diagnosis or a plant closing. You did not fail your plan.

From here, there are a few decisions that can still impact your life and are entirely in your control. Plan for what you have and how long your money needs to last. And build the plan around the life you actually have. And you might not want to hear this, but I will say it. Do not assume there are shortcuts that can change your circumstances. Resorting to risky moves only digs a deeper financial hole. The quieter decisions are the ones that count now, and they are still yours.

If you are still working, plan for the retirement you want but fund the one that may knock years earlier without asking. If the knock never comes, you retire as planned. If you are forced into retirement early, you will be glad you chose to be ready.

You don't pick the date. You pick what the date finds.

Sources

• Backs the expected-versus-actual retirement ages (66 versus 61) and the fact that Gallup has tracked both for more than 20 years. Gallup, Economy and Personal Finance poll, April 2026. https://news.gallup.com/poll/709319/nonretirees-worry-remains-high.aspx

• Backs the 46 percent of retirees who retired earlier than planned, the growing trend (up from 40 percent the year before), the 76 percent whose reasons were outside their control, and the reason list (health, job loss, caregiving). Employee Benefit Research Institute (EBRI) and Greenwald Research, 2026 Retirement Confidence Survey. https://www.ebri.org/docs/default-source/rcs/2026-rcs/2026-rcs-release-report.pdf

• Backs the finding that more than half of stable workers in their early fifties are laid off or pushed out, the difficulty of regaining the old paycheck, and the typical household income falling by almost half. Urban Institute with ProPublica, How Secure Is Employment at Older Ages, December 2018. https://www.urban.org/sites/default/files/publication/99570/how_secure_is_employment_at_older_ages_2.pdf

• Backs Jean Potter's story, the twenty-seven years at BellSouth and the early retirement taken after a layoff notice, and the pattern of older workers pushed out before they chose to go. ProPublica, If You're Over 50, Chances Are the Decision to Leave a Job Won't Be Yours, December 2018. https://www.propublica.org/article/older-workers-united-states-pushed-out-of-work-forced-retirement

• Backs Marjorie Madfis's story, the July 2013 IBM layoff of seven of the nine people on her team, all women in their forties and fifties, and the company declining to give a reason. ProPublica, Cutting 'Old Heads' at IBM, March 2018. https://features.propublica.org/ibm/ibm-age-discrimination-american-workers/

• Backs the claim that the odds of finding work after a layoff shrink with age. Bureau of Labor Statistics, Worker Displacement 2021-2023, August 2024. https://www.bls.gov/news.release/disp.htm

• Backs the odds of a work-limiting health problem in the early fifties, about one in seven for men and one in six for women. Center for Retirement Research at Boston College, working paper 2016-18. https://crr.bc.edu/wp-content/uploads/2019/01/wp_2016-18.pdf

• Backs Pat Summitt's diagnosis of early-onset Alzheimer's at fifty-nine. The Washington Post, August 23, 2011. https://www.washingtonpost.com/sports/colleges/pat-summitt-tennessee-womens-basketball-coach-diagnosed-with-alzheimers-disease/2011/08/23/gIQADEuDZJ_story.html

• Backs Summitt stepping down the following season, after thirty-eight years. CBS News, April 2012. https://www.cbsnews.com/news/pat-summitt-steps-aside-as-tennessee-coach

• Backs the COBRA cost of about $2,300 a month for family coverage (2025 average family premium of $26,993 at the 102 percent COBRA rate). KFF, Employer Health Benefits Survey 2025. https://files.kff.org/attachment/Employer-Health-Benefits-Survey-2025-Annual-Survey.pdf