For many workers, the dream of retiring early sounds ideal — until it happens unexpectedly.
New research shows that nearly six in ten people leave the workforce sooner than they planned, often not by choice. The median retirement age? Just 62, a few years earlier than most expected.
The main culprits: health challenges, job disruptions, and family obligations. Only a small portion — around one in five — said they stepped away early because they had already reached financial independence.
This pattern isn’t new. Other studies have found that half of retirees exit the workforce earlier than intended, typically because life forced their hand.
The Hidden Cost of Lost Working Years
Leaving work earlier than expected can have serious financial consequences. According to experts, those final years of employment often play a crucial role in building lasting financial security.
Those extra five or ten years don’t just add income — they boost savings, increase employer contributions, and raise future Social Security or pension benefits. Without them, retirees could face lasting shortfalls.
And claiming Social Security early only adds to the impact. The average person starts benefits at age 64, but waiting until age 70 can yield significantly higher payments. Retiring too soon can permanently shrink those monthly checks.
Retiring at 62 instead of 67 also means missing out on:
- Five years of potential income and savings growth
- Employer-sponsored retirement contributions
- Additional Social Security credits that would have built a larger benefit later
- And the financial strain of covering health insurance costs before age 65, when Medicare typically begins
Those few years can make a world of difference in how comfortably someone lives out their retirement years.
Finding Your Financial Footing After an Early Exit
Being forced into early retirement can feel unsettling, especially when money is tight. But the first step toward stability is creating a new financial plan.
Experts recommend taking a pause before making any big decisions. This time allows retirees to reassess their situation, understand their cash flow, and outline a strategy that fits their new reality.
Some helpful steps include:
- Revisiting your goals: Adjust your retirement expectations to match your new timeline.
- Re-evaluating your home base: Relocating to an area with a lower cost of living or lighter taxes may free up extra income.
- Reviewing healthcare coverage: Compare COBRA, private insurance, and any employer extensions to manage costs until Medicare eligibility.
- Tapping into overlooked benefits: Unused credit card points, loyalty programs, or other perks can help stretch a budget further.
By taking a clear-eyed look at their finances, retirees can reduce the risk of outliving their savings and gain peace of mind about the years ahead.
Lessons for Those Still Working
For those still in the workforce, the takeaway is clear: prepare early and stay adaptable.
Keep your skills current, nurture your professional network, and make healthy habits a priority. These steps don’t just improve job security — they also help ensure you have the option to keep working as long as you want to.
Life rarely goes according to plan, but with foresight and flexibility, even an unexpected early retirement doesn’t have to derail your financial future.
