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40% of Adults Think They'll Work Until Age 70 or Older

By Maurie Backman – Apr 30, 2018 at 4:09PM

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Here's how to buy yourself an earlier retirement.

Many of us dream of retiring early and escaping the grind ahead of schedule. But early retirement takes careful planning and, most importantly, a commitment to savings. And the latter is something countless workers continue to struggle with.

In fact, 23% of workers 55 and over say they don't participate in an employer-sponsored 401(k) or contribute to an IRA, and that percentage climbs to 40% among younger workers aged 18 to 34. That's the latest from a CareerBuilder study, which also found that 40% of working adults don't think they'll manage to retire until age 70 or older.

Older couple eating at an outdoor restaurant

IMAGE SOURCE: GETTY IMAGES.

Of course, there are plenty of good reasons to postpone retirement, especially given the fact that Americans are living longer today than they did in years past. The longer you work, the more opportunity you'll have to add to your nest egg while stretching whatever savings you have managed to accumulate.

Working longer has also been shown to have health benefits, and from a Social Security standpoint, it's a strategic move. That's because for each year you hold off on filing for benefits past full retirement age, you'll boost your payments by 8% up until age 70 -- for life. And while delaying benefits may not be feasible if you're out of a job, if you still have a steady paycheck coming in, it stands to reason that you might manage to postpone those benefits as long as possible.

But despite the many advantages of working until 70 or beyond, many of us just plain don't want to do it. Rather, we'd prefer to retire early, or at least on time, and enjoy that freedom while we're younger and have the energy to make the most of it. If that's the case, then here's what you need to do to achieve that goal.

1. Start saving immediately

The current annual retirement plan contribution limits for workers under 50 are $18,500 for a 401(k) and $5,500 for an IRA. For workers 50 and older, these limits increase to $24,500 and $6,500, respectively. Now if you manage to max out either account type for the bulk of your career, you should be in pretty good shape to retire before 70. Most people, however, can't afford to part with that much of their income, and that's OK, because you don't need to max out a retirement plan to build a sizable nest egg; you just need to save consistently over time.

If you're 30 with the goal of retiring at 67, and you set aside $400 a month throughout the remainder of your career, you'll have $770,000 to work with, assuming your investments generate an average annual 7% return during that time. If you're older, and don't have nearly as lengthy a savings window, you'll need to do better. But if you're 55 and sock away $1,000 a month for the next 12 years, you'll add about $215,000 to your nest egg, assuming that same average annual 7% return.

No matter how old you are, the best way to buy yourself the option to retire early or on time is to save as much as you can -- starting now. Furthermore, you'll need to make the right investments to grow your money substantially. The 7% return referenced above assumes a stock-heavy portfolio, and it's actually several points below the stock market's average. Play it too safe, however, and your savings might suffer.

2. Rethink your budget

Many people don't save for retirement because their living expenses monopolize their income. But if you're serious about retiring before 70, you'll need to rethink the way you spend money. So take a look at your budget (or create one if you don't have one yet) and find ways to cut corners, whether it's slashing one major expense, like your housing costs, or making smaller changes, like reducing what you spend on cable, restaurant meals, and activities. The more cash you're able to free up and save, the greater your chances of retiring when you want to.

3. Consider a side hustle

Sometimes, despite your best efforts, you can only save so much of your earnings after cutting expenses and paying the bills. If you need to catch up on retirement savings, you may want to consider a side hustle to generate extra cash. The beauty of that income is that it's money you were never counting on in the first place, which means you should have little trouble stashing it all away in your IRA or 401(k).

Another benefit of starting a side gig is that you might discover another line of work you enjoy. If you're younger, that's something you can pursue for a more fulfilling career. If you're older, it's something you can consider doing part-time in retirement to bring in money and allow for an earlier departure from your full-time job.

Though working longer has its perks, if that's not what you want, don't resign yourself to that fate. Instead, take steps to retire when you see fit, even if it means sacrificing a little along the way.

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