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Retirement in the United States is coming later for people now than it did in the 1990s. At that time, the average age at retirement was around 60. Today, it’s inched up to around 66. That means that people are working longer, but this is offset by a life expectancy that’s gone up to nearly 78. Therefore, the average American worker can expect to spend about 12 years in retirement. For some people, it can be much longer. Those with good health can expect to live for 20 or 30 years after retiring before passing on. This means that they’ll need to prepare ahead of time.

Young Adults And Expectations

Many young adults have the belief that they will be able to retire at a very young age. Perhaps they had parents who retired in their 50s. However, life frequently gets in the way of the plans of many younger Americans. The cost of a college education and housing can quickly eat of a huge chunk of what might appear to be a comfortable middle-class income. This can cause people who want to retire early to put off saving for retirement when they have time on their side. Time and compounding are key to building up a healthy nest egg.

Older Adults And Reality

While today’s young adults expect to retire early, those currently at the age young Americans expect to retire have around $100,000 saved on average. The average American who is 55 to 64 years old has $107,000 saved for their golden years. Using the 4% Rule that is commonly cited by American retirement planners, that nest egg will produce slightly more than $4,000 per year, which will not even pay the rent on a studio apartment in most US cities. Social Security will add a bit. The average payment is around $1,500 monthly, which will still be lower than most people will need to live a comfortable life.

Planning for retirement early in life is the key to getting to retire early. Experts traditionally recommended saving at least 10% of every dollar earned for the future. Many are now pushing workers to save between 15% and 20% for retirement, fearing that the old recommendation will not be enough due to the end of many work-sponsored pension plans. This requires discipline, but it is likely to lead to success in the long run.