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A blog about living in and planning for retirement

One in Five Workers Planning Early Retirement

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Perhaps the notion of an early retirement isn’t dead, after all.

A  report finds that 21% of surveyed workers say they expect to retire before age 65. The study, from the Transamerica Center for Retirement Studies, which my colleague Catey Hill mentioned yesterday, comes at a time when a fragile economy, coupled with equally fragile nest eggs, has most people delaying plans to leave the office.

If there’s a common characteristic among those individuals who expect to get a jump on retirement, it’s “highly proactive savings behaviors,” says Catherine Collinson, the center’s president. “Despite the down economy, most future early retirees have found a way to save the same or more since the recession began.”

The report – titled, “A Source of Inspiration: Future Early Retirees” – begins by noting that the approximately one in five workers who expect to retire early are “not necessarily born out of privilege or ultra-affluence.” Rather, they appear to be remarkable for being unremarkable: only about half (52%) have a college degree, about half (49%) are over the age of 40, and about half (again, 49%) have an annual household income of less than $100,000.

Of course, an expectation to retire early isn’t a guarantee of the same. Even these “future early retirees,” the center notes, have room for improvement:  41% “guessed” how much money they might need for retirement; only one in three (34%) say they “know a great deal” or “quite a bit” about the basic principles of retirement investing and asset allocation; and only three in 10 (29%) have a backup plan if they’re forced to retire earlier than planned.

Still, their efforts give them a better chance of having a financially successful future, whenever they actually retire. With that in mind, the report urges readers, among other steps, to:

— Calculate your retirement savings needs

— Develop a retirement strategy – and put it on paper

— Educate yourself about retirement investing

— Participate in a retirement plan at work and defer as much of your salary to the plan as possible

— Have a backup plan if you’re unable to work before your planned retirement.

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About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.