The New Finance of Longevity

67% of Early Retirees Save Before Age 40

Almost a quarter of respondents 65 or older haven’t started saving for retirement

Excerpts from a new survey demonstrate how saving early in one’s career is crucial to having the option to retire early. Access full report here.

Who doesn’t dream of early retirement after a long, tough week of work? Some Americans have made that dream a reality. Whether it’s the physical demands of a job or pressure from the boss and irritating co-workers, the drawbacks of working get to you more and more as the years go by.

Even if you love your job, having the financial means to retire early is a form of freedom. It allows you to retire on your terms when the time is right. Financial freedom can also help protect you against the kind of setbacks that could affect your company or industry and ultimately cost you your job

“Looking at what has worked for people who retired early, getting an early start on savings seems to be a key factor,” says Richard Barrington, MoneyRates’ senior financial analyst. “Those who are still working after reaching age 65 are much less likely to have started saving for retirement in their 20s and 30s than those who were able to retire before age 65.”

Retirement Planning Survey surveyed 1,000 people aged 45 and over to discover the state of retirement planning in 2020. Half of those surveyed had not yet reached the traditional retirement age of 65, and half of them had. One clear outcome of the survey substantiated the premise that starting to save early in your career has an impact on your ability to retire early. But the goals of the study were larger in scope.

The study was designed to see where people’s retirement plans stood, both as they approached retirement age and after reaching it. With that data, we could:

  • Learn how many people are able to retire early
  • Explore the relationship between early savings and early retirement
  • Develop tips to help people save early and build wealth though investments in retirement accounts

Who Has Reached Early Retirement?

The survey found that just over 1 in 5 (21.6%) of those surveyed who are younger than age 65 have already retired. Another 8% of those younger than 65 are semi-retired. In total then, 29.6% of those aged from 45 to 64 have already been able to quit working completely or cut down to working part time.

While not a majority, it does show that a significant number of Americans have been able to retire or semi-retire early. Some have been able to make the dream of early retirement happen even sooner. The survey found that 10.4% of those aged from 45 to 54 are already retired. Another 7.2% in this age group are semi-retired.

How Many Americans are Working Past Retirement Age?

Those who are still working after reaching age 65 are much less likely to have started saving for retirement in their 20s and 30s than those who were able to retire before age 65...

On the other side of the ledger, some Americans are continuing to work past age 65. Instead of retiring early or even on time, these folks will be retiring late. The survey found that 16.2% of respondents are still working full or part time after reaching the age of 65.

Of course, for some, working past retirement age is a choice. In many cases, though, it’s a matter of financial necessity. One goal of retirement planning should be to make how long you work a matter of choice. That means having enough saved to support a comfortable retirement by the time you reach age 65, whether you choose to start using the money then or not.

The survey also reveals:

  • Just over 1 in 5 (21.6%) workers younger than 65 are retired and 8% of those younger than 65 are semi-retired
  • Roughly two-thirds (66.9%) of those retired or semi-retired before age 65 started saving for retirement by age 40
  • Of respondents 65 or older, 16.2% are still working full- or part-time
  • Of those still working full- or part-time at age 65 or older, only 18.2% started saving for retirement by age 30
  • In contrast, 23.4% of those still working at age 65 or older have not yet started saving for retirement

MoneyRates offers actionable advice to help consumers retire early, such as making payroll deductions into a 401(k) plan, depositing a portion of each paycheck directly into savings, shopping for the best interest rates, and planning a budget around retirement saving.

“Someone who makes saving for retirement a priority has a better chance of saving money more consistently,” adds Barrington. “There’s nothing wrong with continuing to work after age 65. But ideally, it should be a choice, not a necessity. The message for younger workers is starting to save now, and learning not to overspend, gives more freedom of choice later on.”

MoneyRates queried 1,000 people aged 45 and older in an OP4G survey to find out where they stood in terms of their retirement planning.

MoneyRates’ spokesperson Richard Barrington is available for commentary on this study as well as banking and personal finance topics.




MoneyRates is owned and operated by QuinStreet, Inc. (Nasdaq: QNST), a pioneer in delivering online marketplace solutions to match searchers with brands in digital media. QuinStreet is committed to providing consumers with the information and tools they need to research, find and select the products and brands that meet their needs. MoneyRates is a member of the company’s expert research and publishing division.
Since 1998, MoneyRates has served as a personal finance resource designed to help readers make the most of their money. In addition to a variety of financial calculators, MoneyRates researches and tracks CD, savings, and money market rates offered from over 400 financial institutions across the country to offer expert advice on banking, investing and retirement planning.