Over 56% of Americans Wish to Live Past 100, With Many Eyeing Early Retirement; But How To Fund It?

Over half (54%) of Americans wish to live up to 100 years and most of them plan to retire early, according to a new study from Corebridge Financial and The Longevity Project. This means some workers are aspiring for nearly a four-decade-plus retirement which can be difficult to fund given the current economic climate. Soaring costs and high inflation have already forced Americans to reduce their retirement savings while some are even dipping into them.

Live Long Retire Early is still the dream

According to the survey that polled 2,300 adults, about 40% of the respondents aspired to retire between the ages of 65 and 69 which means they are expecting a retirement period of over 40 years. However, there was a small percentage of people, about 26%, who believed they would need to work past 70. Further about 22% expect to retire even earlier, that is between ages 62-64, and only 12% aspire to retire between 50-61. Gen Z is the most optimistic about the 50-61 age range, per the survey.

Do Americans have enough to fund a four-decade plus retirement?

The national average for an American to live comfortably in retirement is around $967,000 in savings, CBS reported, citing the Federal Reserve. While retirement scenarios differ from person to person, the most common average comes out to be $74,000 a year worth of savings to live through retirement.

However, according to a 2022 study conducted by NerdWallet, the median retirement savings balance for people who are between 55 and 64 stood at $185,000. This suggests the older generation today is merely years away from running out of their retirement savings. Furthermore, a 2023 NerdWallet study found that about 60% of the respondents didn’t have a retirement-specific account.

In case of the future retirees, one in three (32%) of full-time and part-time workers estimate they would need more than $1 million to retire comfortably, according to a Bankrate poll. The study also found that about 45% of those workers felt it was unlikely they’d be able to save enough to retire comfortably. The Bankrate study also found that over half (56%) of Americans in the workforce think they’re falling behind when it comes to retirement savings.

Even the Corebridge Financial study found that only about 4 in 10 respondents believe their savings will last 20 years in retirement. This means while Americans wish to live longer, very few believe they will have enough funds to stretch their retirement that long.

How to plan savings for an early retirement

The first step towards planning for retirement is to determine the retirement age and period. After that workers need to figure out how much money they would need to comfortably live through their retirement period, in this a retirement calculator may help.

Furthermore, regardless of the retirement age or period, it is always advisable to start saving early while working and max out retirement accounts like individual retirement accounts (IRAs) and 401(k)s, as per Investopedia.

A traditional IRA helps workers contribute towards their retirement, and those savings grow tax-free over time. Furthermore, future retirees even get a tax deduction in the tax year they contribute money. However, at the time of withdrawal during retirement, the money is taxed as per the applicable income tax rate in the year of the withdrawal.