Maybe not as much as you think according to this recent update by Alica H. Munnell from the Boston College Center for Retirement Research which shows that trend leveling off.
Aside from just being an interesting chart (Perhaps I'm super-geeky about this but I didn't expect it to be shaped quite that way), Figure 5 lends some additional food for thought for all of us who are facing retirement someday in the future. When will I actually retire? How long will I be retired? Will I run out of money?
"I'll just work longer/till I die" is something that I've heard countless times over the last 18 years. Usually I've heard it as an especially seductive 'excuse-splanation' for not making realistic preparations for one's financial well-being in retirement or in case of a disability.
I get it; saying "I'll just work longer" feels so much less emotionally and financially painful in the moment than working with a skilled financial planner to take a realistic look at what it might take for you to retire someday.
But not facing the math means that the vague yet insurmountable "I will NEVER be able to afford to retire" is in no danger of ever being replaced with something more specific and, thereby, more empowering. Living with something like, "I could retire when I'm 67, but only if I cut my expenses by 8% and save an extra 4% into my 401(k)" might be a big drag, but it's not nearly as hard to sleep on as "I will NEVER be able to afford to retire" and at least you have some idea what to do about it.
Avoiding the math also fails to ease those worries so many of us have about whether or not we'll be okay in retirement. Whatever you or I might try to tell ourselves, the part of our minds that occasionally has us staring at the ceiling in the middle of night worrying that we'll somehow wind up a bag lady someday might be a smidgeon melodramatic but it isn't fooled one tiny bit. It knows that hoping things will just work out somehow, isn't an actionable plan.
Here's why you shouldn't fool yourself either: A recent study from the Employee Benefits Research Institute "... has consistently found that a large percentage of retirees leave the workforce earlier than planned (49 percent in 2014). Many who retire earlier than they had planned often do so for negative reasons, such as a health problem or disability (61 percent)..."
Whether it's because you can't continue working; because you lose your job and struggle to find new one because of ageism; because you stop working to care for a loved one; or any number of other reasons, people frequently wind up retiring sooner than they expect.
Whether you decide to do the math on your own, or with a skilled planner, make sure that you are not only on track for retirement when you plan, but also that you are going to be at least minimally okay if you can't work as long as you want.
Doing the math yourself, paying for high quality fiduciary financial planning, tweaking your retirement savings rate, and/or getting some additional disability insurance now might not be as painful as you fear and it could make all the difference if you wind up in the 49% of folks who retire sooner than they expect.