7 in 10 Pre-Retiree Investors Say Retirement at 65 Not Achievable — 3 Ways To Defy the Odds

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The silver tsunami is here. Indeed, more than 4.1 million Americans will turn 65 each year through 2027, which amounts to more than 11,200 Americans retiring every day, according to an Alliance for Lifetime Income report published in January.

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Although the Social Security retirement age is 67 for anyone born in or after 1960, 65 remains the goal for many Americans because that was their parents’ retirement age. Yet, when it comes to what these Americans will face in retirement, it might be a very different story — and a more difficult one — than their parents faced.

A case in point: Seven out of 10 pre-retirees, defined as non-retired investors ages 55 to 65, say the traditional retirement age of 65 doesn’t apply to them, according to Nationwide’s ninth annual Advisor Authority survey.

What’s more, the survey found that a whopping two-thirds (67%) of pre-retirees expect to face more challenges in retirement than their parents and grandparents.

Eric Henderson, president of Nationwide Annuity, said that while this year marks the beginning of the largest surge of Americans turning 65 in history — the Alliance for Lifetime Income coined the phrase “Peak 65” to describe the unprecedented surge — many investors are resetting their retirement expectations due to concerns about inflation and running out of money in retirement.

“These factors, along with a lack of trust in traditional retirement safeguards like Social Security, are causing a majority of pre-retiree investors to say the norm of retiring at 65 no longer applies to them, with 22% expecting to retire later than planned and 9% unsure if they’ll ever be able to retire at all,” he noted.

These shifts in retirement perception translate into 41% of pre-retirees saying they would continue working in retirement to supplement their income out of necessity, and 27% planning to live frugally to fund their retirement goals. In addition, 22% said they are expecting to retire later than planned.

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What Are the Main Challenges They Are Facing?

Henderson explained that pre-retirees are feeling unsettled after living through the last few years of economic turbulence and seeing the impact of fluctuating markets on their retirement portfolios.

In fact, the survey found that more than half (57%) of pre-retirees said inflation poses the most immediate challenge to their retirement. Forty-nine percent of non-retired investors ages 18 to 54 expressed the same concern.

Inflation is also causing 27% of pre-retirees to save less for retirement.

“Their lack of trust in Social Security is also posing a challenge, with 43% not counting on Social Security as much as previously expected, and 27% expecting to receive less in Social Security benefits than previously anticipated,” said Henderson.

What can pre-retirees do to feel better prepared, and how can they defy the odds?

Work With an Advisor

Henderson noted that the years just before retirement are critical for investors as they face decisions that can have implications for the rest of their lives.

“The best thing a pre-retiree investor — or any investor — can do to feel more confident about their retirement is work with a financial professional,” he said, adding that advisors can guide their clients on when to claim Social Security benefits, how to generate guaranteed income and what to plan for when it comes to taxes and healthcare costs in retirement.

Incorporate Investment Strategies That Protect Against Risk

Henderson stressed that during times of economic uncertainty, it’s important consider incorporating strategies such as annuities that protect against market risk.

Be More Frugal

Iidentifying fixed expenses and cutting back on non-essential spending can help investors save more for retirement, Henderson said.

“For younger investors, your biggest opportunity is to start investing and planning right now — don’t wait until you are nearing retirement to build a nest egg, and at least start thinking about a plan for achieving your goal,” said Henderson.

Henderson noted that a great place to start is to make sure you’re fully leveraging retirement benefits offered by your employer.

“By crafting a plan for the future that can endure through different market and economic cycles, a secure and comfortable retirement is achievable — even for those who may be feeling pessimistic about their current outlook,” he added.

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This article originally appeared on GOBankingRates.com: 7 in 10 Pre-Retiree Investors Say Retirement at 65 Not Achievable — 3 Ways To Defy the Odds