Why so many workers retire earlier than planned

Half or more of all U.S. workers retire earlier than they had planned. The Retirement Confidence Survey from the Employee Benefit Research Institute (EBRI) reports that nearly one out of two -- 49 percent -- of retirees left the workforce earlier than they had planned. That finding is consistent with a recent report from Merrill Lynch/Age Wave that reports more than half -- three out of five -- retirees say they retired earlier than they had expected.

The reasons for these earlier retirements reflect the range of events and circumstances that people experience in their later years. The EBRI survey reports both positive and negative reasons for people retiring earlier than planned. On the positive side, 26 percent said they were able to afford an earlier retirement, and 19 percent just wanted to do something else.

Among the negative reasons:

  • 61 percent cited health reasons
  • 18 percent cited changes at their company, such as downsizing or layoffs
  • 18 percent needed to care for a spouse or family member
  • 7 percent said the skills needed for their job changed

According to the Merrill Lynch/Age Wave report, the reasons respondents gave for early retirement were, in order of prevalence:

  • 34 percent reported personal health problems
  • 27 percent accumulated sufficient financial resources to retire
  • 24 percent lost their job
  • 16 percent wanted to spend more time with family
  • 10 percent needed to care for a family member

That raises the question of what you can do to minimize the financial and emotional damage that could result from early retirement. Here are some steps to take, the same ones you would take to plan for a satisfying retirement:

  • Take care of your health
  • Save for retirement
  • Control your spending
  • Keep your job skills and contacts up-to-date
  • Nurture a rich social network

It may sound like a tall order, but if you take it one step at a time, you'll make significant progress in the months and years to come. And if you find yourself unexpectedly out of work, you'll be in better shape with money in the bank, no credit card debt, good health, a supportive network of family and friends, and realistic hope for finding new work.

While I'm a big fan of planning ahead, the reality is that you can't prevent every possible unfortunate event that can happen, such as a family member needing care, getting laid off or an unavoidable health condition.

Often the best you can do is to take reasonable and realistic steps to improve your financial, physical and social health, and find the resilience to bounce back when life deals you a tough hand.

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    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.