Nearly half of US retirees exit workforce early as health and job loss drive unplanned exits
With 46% of Americans retiring at 62 instead of 65, financial planners urge near-retirees to build liquidity buffers and utilise catch-up contributions to mitigate the risks of involuntary early departure.
Data from the 2026 Retirement Confidence Survey, conducted by the Employee Benefit Research Institute and Greenwald Research, indicates that 46% of American retirees left the workforce before their intended age. The average actual retirement age was recorded at 62, significantly earlier than the average expected age of 65. This premature exit from the labour market carries substantial financial implications, including three fewer years of contributions, three additional years of withdrawals, and a critical gap in employer-sponsored health insurance coverage before Medicare eligibility begins.
A parallel study by the Society of Actuaries Research Institute found an even starker divergence, with 59% of retirees leaving the workforce earlier than planned, while only 6% retired later than intended. The primary drivers of these unplanned exits are largely outside individual control. Health issues, job loss, and business closures accounted for the vast majority of early retirements, disproportionately affecting lower-income workers. For retirees with household incomes under $35,000, changes in health status were cited by 49% as the primary reason for retiring early.
Corporate restructuring, downsizing, and business closures accounted for 35% of early retirements in the EBRI/Greenwald survey. Job loss impacted 18% to 20% of early retirees across all household income levels. Together, health-related events and job loss drove 76% of all unplanned early retirements last year, underscoring that for most workers, early retirement is a necessity rather than a choice.
The profile of early retirement differs markedly for higher-income earners. Among retirees with household incomes exceeding $75,000, job dissatisfaction was the leading reason for early retirement, cited by 29% of respondents. Achieving a savings goal earlier than expected ranked second at 24%. For this demographic, early retirement is often a voluntary decision enabled by financial security, contrasting sharply with the involuntary nature of exits for lower-income groups.
Financial preparedness is critical given that the median retirement savings balance for an American in their 50s was $460,363 as of 2026, according to Empower. To accelerate savings, workers aged 50 and older can contribute an additional $8,000 to a 401(k) above the standard limit in 2026, while those aged 60 to 63 qualify for a catch-up contribution of $11,250. Experts recommend maintaining three to five years of living expenses in a safe, accessible account to avoid selling investments during market downturns, ensuring flexibility in the face of unexpected financial setbacks.
