Americans Plan to Retire at 65 but Leave Work at 62

Retiring earlier than planned can leave a gap in savings, health coverage and income. In an Employee Benefit Research Institute survey, the median expected retirement age was 65, but the median actual age was 62. A backup plan can give workers more choices if work ends sooner than they expect.

In Brief

• The median actual retirement age was three years below the median expected age in the survey.
• Almost half of retirees said they left work earlier than they had planned.
• Early retirement can mean fewer years of saving and a need to arrange health coverage before Medicare.
• Review savings, work plans and Social Security timing well before retirement.

Why retirement can start sooner than expected

Retirement at 65 is a common goal, but it is not always a choice workers can control. In the survey, 41% of people who retired early said hardship, including illness, was the reason. Another 35% pointed to changes at their employer or organization.

Those figures make a later retirement date a risky assumption for planning. A job loss, health problem or workplace change can shorten the time available to build savings, even for someone who expected to keep working. Starting a contingency plan in your 40s or 50s leaves more time to adjust contributions and consider whether your current job is sustainable.

What three fewer working years can cost

The effect depends on earnings and contributions. For a worker earning $80,000 who puts 5% of salary into a 401(k) and receives a 5% employer match, working from 62 to 65 would add $24,000 in contributions compared with stopping at 62. That figure does not include potential investment growth on the additional money.

If you are 50 or older, you may qualify to make catch up contributions. For 2026, the limits are $1,100 for an IRA and $8,000 for a 401(k). Check your plan rules and current contribution totals before deciding whether to increase what you save.

Cover the years before Medicare

Health insurance is another cost to plan for. Medicare is generally available starting at age 65, so people who retire before then need to identify another source of coverage. Options mentioned for early retirees include joining a spouse’s plan, continuing coverage through COBRA, or shopping on the Affordable Care Act exchange.

Compare the available coverage and costs before leaving work rather than assuming a particular option will fit. Eligibility and price depend on the circumstances and plan available to you. Put expected premiums and other health costs into the retirement budget, alongside regular expenses.

Plan Social Security around your actual timeline

Claiming Social Security early can bring income sooner, but it can also reduce monthly benefits. For someone whose full retirement age is 67, claiming at 62 reduces the monthly benefit by 30%. Whether an early claim makes sense depends on factors including life expectancy and whether a spouse receives benefits on that person’s record.

In your early 50s, assess whether your current role is one you can realistically continue until your intended retirement date. Geoffrey Sanzenbacher, a professor of the practice at Boston College, recommends considering a job change if staying in the current position seems unlikely. A role that better matches your abilities and timeline may help you keep earning and saving. Revisit the plan as work, health and household circumstances change, and make sure it still works if retirement arrives at 62 rather than 65.