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Many workers look forward to the day when they can retire.
A recent survey from Natixis Investment Managers set out to find out exactly when most Americans hope to stop working.
The average age is 62, the research found.
However, it turns out when people to hang up their hats varies by generation.
The youngest cohort, Generation Y — ages 25 to 40 — plans to retire at an average age of 59. For Generation X — now 41 to 56 — the average age is 60. Baby boomers — who range from 57 to 75 — indicated they plan to work longer, with an average expected retirement age of 68.
That’s as 83% of non-retired U.S. investors said they are confident they will be financially secure in retirement. That includes 88% of Gen Y, 82% of Gen X and 79% of baby boomers.
Even so, 41% of respondents said achieving financial security in retirement is “going to take a miracle,” the survey found. That sentiment was highest among Gen Y, with 46%, and Gen X, 45%, while baby boomers came in with 30%.
While there is a general sense of confidence, the results show there are a number of questions people have with regard to retirement planning, said Dave Goodsell, executive director at Natixis’ Center for Investor Insight.
Those questions include: When am I going to retire? How much money am I going to need? How long will the money need to last?
“There are a lot of things that cause nagging doubt for people,” Goodsell said.
The survey included 750 U.S. investors who had a median of $450,000 in investable assets. The U.S. results are part of a global survey of 8,550 individual investors. Notably, the average retirement age for that broader group around the world was also 62.
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In the wake of Covid-19, financial advisors say, many clients are now asking, “Can I retire earlier?”
Much of whether or not that can happen in the future depends on the actions workers take now.
Certain strategies can help you save more with the money you already earn.
Increasing your income — particularly through a side hustle — can help you reach your retirement savings goals even faster.
“I tell my clients, if you want to shave off 10 years pre-retirement, that means we really need to hustle now and find other ways to bring in income,” said Winnie Sun, managing director of Sun Group Wealth Partners in Irvine, California.
There are reasons why baby boomers are pushing their retirement to a later date.
Workers who wait to claim Social Security until full retirement age — up to age 67, depending on when they were born — stand to get 100% of the benefits they earned. If they claim earlier, starting from age 62, their monthly checks will be permanently reduced. If instead they wait until age 70, they stand to get the largest possible benefits.
Research from the Center for Retirement Research at Boston College shows that Americans mostly tend to claim retirement benefits either around 62 or their full retirement age as defined by Social Security.
Delaying retirement past age 62 can also enable someone to wait until Medicare eligibility age — generally 65 — and continue to earn income.
Yet not everyone has a choice as to when they retire, which can happen unexpectedly due to unforeseen health or career circumstances, such as a late career layoff, Goodsell said.
The key is to prepare for what all circumstances can bring.
“There’s a lot that can be done to educate individuals on what their investment options are, how to go about planning for retirement and how to put the pieces together,” he said.