More workers are planning to retire at 65, but research suggests they may be overly optimistic

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More workers say they expect to retire at 65, but research shows they may be too overly optimistic

Heidi Brockway spent about two years trying to land a job after a three-decade stint in early education and a brief retirement in between.

“I was applying to jobs that I was perfectly qualified for, if not overly qualified, and I would just get zapped time and time again,” Brockway, 66, recently told CNN.

Brockway had decided to rejoin the workforce after realizing her small pension wasn’t enough to cover expenses. After a fruitless job hunt in Los Angeles, she sold her house and moved with her husband to Southeast Florida in the hopes she would find more opportunities for older workers.

Brockway was finally offered a job as an aide at a nearby preschool.

“I now sweep, clean toilets, mop and empty trash for $13.40 an hour and all the pride I can swallow. But I am employed at least,” she said. “I was an early education teacher for 30 years. Now I clean a preschool. But I can afford groceries.”

Despite several reports of older Americans extending their employment or “unretiring” like Brockway did, new research shows that workers may be overly optimistic when it comes to how long they can remain in a labor market that becomes increasingly unfriendly to people as they age.

The latest installment from the Employee Benefit Research Institute’s (EBRI) 34-year survey of workers and retirees revealed 28% of workers expect to retire at age 65 — up from 23% a year ago. But in reality, the median age of retirement has been 62 for several years — the same year Americans can start claiming Social Security benefits.

Multiple experts and finance personalities like Suze Orman have touted the idea of delaying retirement and claiming Social Security benefits later to snag bigger payouts, but some older Americans simply have no choice than to retire at 62, or even earlier.

Half of retirees surveyed in the EBRI report said they retired earlier than planned and nearly 70% point to reasons outside of their control, such as health issues, layoffs or the need to provide care for family members.

Craig Copeland, director of wealth-benefits research at EBRI, told the Wall Street Journal that this raises the stakes of how much Americans need to save for retirement.

While three-quarters of workers in the EBRI study say they expect to continue working in retirement, only 30% of retirees actually do. Hal Hershfield, a psychologist at the University of California Los Angeles told the WSJ a bias toward optimism leads many Americans to believe “work will be there for us, while that may not be the case due to rampant ageism.”

AARP research showed that 64% of adults aged 50-plus in the labor force think older workers face age discrimination in the workplace today. Hiring managers might make discriminatory judgments and assume older workers aren’t as tech-savvy or productive as younger folks, or have concerns regarding potential health issues.

Advocates for older workers say the group brings incredible value to the workplace due to their lived experiences and reliability — while digital skills can be taught through training. John Tarnoff, a reinvention career coach based in L.A., told Moneywise in 2022, “It’s vital that older workers dive in and roll up their sleeves along with everybody else. There is no reason why an older worker can’t learn the same remote work skills and technology skills as a younger worker.”

Tarnoff also explained that while the Age Discrimination and Employment Act was enacted in 1964 to protect workers over 40, it’s “not a particularly useful tool” since it’s so hard to prove age discrimination in the workplace.

His advice to older Americans looking for jobs is to “really double down on the value proposition that you deliver as a worker” and match themselves to employers and companies that are seeking that specific value proposition.