Many Americans retire earlier than planned. They have regrets

Americans are retiring sooner than they expect, and most retirees wish they had done a better job saving. 

Those are the conclusions of a new report from TIAA Institute, a research arm of the retirement services provider.  

The findings are probably related, TIAA leaders say. Workers who retire early have less time to save, and their savings must cover a longer retirement. 

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Roughly three-quarters of retirees surveyed said they regret not saving earlier in their lives. Nearly three-quarters said they wished they had saved more. 

“People are expressing regret,” said Surya Kolluri, head of TIAA Institute. “That’s a powerful emotion. We can take that emotion and apply it to people who have not left the workforce.” 

Many Americans retire before they had planned

The new report, Bridging the Gaps in Retirement Expectations, joins a larger body of research that shows American workers tend to retire before they had planned and before they are ready. 

In the TIAA Institute survey, released July 22, the average retiree said they had retired at age 57. Of those retirees, 52% said they retired earlier than expected, while only 6% said they retired later than planned. 

The average working American in the survey, by contrast, said they expect to retire five years later, at 62. The survey reached 1,591 adults ages 22 to 75. 

Earlier studies have consistently found that American workers retire before they had planned.  

Two annual surveys, given by the Employee Benefit Research Institute and the Transamerica Center for Retirement Studies, both show that American workers tend to retire around age 62.  

Most workers don’t plan to retire that early. According to the latest EBRI survey, the average worker expects to retire at 65. According to Transamerica, 39% of workers plan to retire after 70, if at all. 

Workers often map out retirement plans around two or three milestone ages. One is 65, when Medicare becomes available. Another is 62, when most retirees become eligible for Social Security. A third is 67, which Social Security regards as full retirement age for most workers. 

In the end, however, most workers don’t get to choose when they retire. Retirement often hits suddenly and unexpectedly, via a corporate layoff or a household health setback. 

“It could be a health incident. It could be caregiving. It could be displacement. It could be AI,” Kolluri said. 

Retiring early can disrupt your retirement plan

Retiring early and unexpectedly can have a profound impact on a retirement plan.  

Let’s say a worker plans to save $500,000, to retire at 65 and to use the savings and Social Security to fund a 20-year retirement. 

Now, let’s say that worker gets laid off at 60 and can’t find another job. That means they have five fewer years to save for retirement, and those savings must fund five more years of retirement. 

On top of those setbacks, the early retiree isn’t yet eligible for Social Security or Medicare.  

Workers should plan for an early retirement

One takeaway from the survey, Kolluri said, is that workers need to plan for a retirement that may come sooner than they think. Workers can plan to retire at 65, he said, but they should save enough to cover a retirement that begins earlier and lasts longer. 

“Given this data, I would say, let’s do three scenarios,” he said. “Let’s do 57, 62 and 65.” 

Workplace retirement savings plans “are more important than ever” in meeting those goals, the TIAA Institute report says.  

In the survey, 70% of workers said they had access to a 401(k)-type plan, and 89% of those workers said they were enrolled. 

Three-fifths of workplace retirement savers said they had been automatically enrolled. Autoenrollment is viewed as key to the future success of retirement saving, because that feature tends to raise saving rates. 

Starting in 2025, most new 401(k) plans had to automatically enroll employees rather than leave the decision to them.   

Here are some tips for workers to boost retirement savings.

Max out tax-advantaged retirement savings  

Consider setting aside as much as you can in tax-favored retirement accounts.   

The 401(k) already has high contribution limits, $24,500 in 2026. If you’re near retirement, consider pushing your savings as close to the maximum as you can afford.   

Americans 50 and older can save even more with “catch-up” contributions, which push the annual 401(k) limit to $32,500. A smaller subset of savers, in the 60-63 age range, get an even higher catch-up limit of $35,750.  

Individual Retirement Account contribution limits are lower: $7,500, or $8,600 for those 50 and older.  

Keep working, if you can 

Postponing retirement, even by a year or two, can be a powerful tool for building retirement savings.   

A Stanford University study found that delaying retirement by just three to six months has the same impact on retirement savings as raising your 401(k) contribution rate by a full percentage point for 30 years.  

Let’s say you put off retirement for a year. In that year, you can max out retirement savings, potentially adding tens of thousands of dollars to your account. And you won’t be drawing down your savings, which means they’ll last longer once you do retire.  

Build up cash savings  

The closer your retirement date, the more likely you will soon need to tap your savings for living expenses. Ideally, you should have some of those savings in cash.  

A wise goal, retirement experts say, is to amass at least a year’s worth of living expenses in cash or cash-equivalent accounts, such as high-yield savings or money market funds.   

This article originally appeared on USA TODAY: Many Americans retire earlier than planned. They have regrets