By Glenn Ruffenach
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.