Why Americans may not retire when they think – and it might not be their choice

Many Americans think they will work a lot longer than they actually do. This means your clients may retire earlier than planned – sometimes by choice, and sometimes not. Either way, retiring earlier than the typical timeline can present a risk to Americans’ financial plans by putting stress on their assets and potentially depleting them prematurely.

That said, retiring earlier than expected is common. Overall, two in five Americans (40%) retire earlier than they planned, according to the EBRI/Greenwald Retirement Confidence Survey 2025.1 An early retirement necessitates greater savings to fund additional years after leaving the workforce.

The problem is that many Americans believe they will continue working – and continue saving – longer than many actually do. Even though 30%1 of workers think they will retire after age 70 or never retire, just 9% do this. And while some may choose to retire earlier than planned because they can afford to (44%), the majority leave the workforce because of reasons outside of their control. This is often because of hardship such as a health problem or disability (31%)1 or changes at their company (31%).1

Retiring early by choice

Americans who can afford to retire earlier than expected may take on a purpose-driven view of retirement. The majority of Americans (64%) view retirement as a perfect opportunity to rethink and redefine their purpose in life, according to the 2025 Annual Retirement Study2 from the Allianz Center for the Future of Retirement™. They may use this extra time to travel, give back to their community, or build new skills. For these clients, it’s important to advise them to consider how they will spend their time in retirement and their interest in part-time work.

Retiring early, but not by choice

Retiring earlier than expected poses a more pronounced risk for clients who don’t leave the workforce by choice – but because of outside circumstances. These circumstances could include a health problem or needing to care for a loved one, or changes at their company that lead to losing a job.

To be sure, Americans have these concerns already. The majority of working Americans worry about hardships such as cognitive decline impacting their ability to work as long as they hope (50%).2 At the same time, many (45%) worry that they will be laid off this year, as revealed in the 2025 2Q Quarterly Market Perceptions Study.3 It is also often more difficult for workers who are close to retirement age to find new employment after a layoff. On average, workers over age 65 spend 31.5 weeks unemployed, and workers between ages 55 and 64 are unemployed for 25.5 weeks, according to the U.S. Bureau of Labor Statistics.4 While these factors are outside of a client’s control, it underscores the importance of preparing for retirement and incorporating risk management strategies.

How a financial professional can help

When a client is considering retiring earlier than expected, it’s important to assess whether they are ready financially. A retirement income strategy that has identified sources of income, total expenses, and any income gaps will help measure their readiness. The critical work of a financial professional is to help ensure that a client’s money can last their lifetime.

Clients can feel overwhelmed by a change in plans. A written retirement strategy will help guide them through this situation. While many people incorporate contingencies for retirement risks, such as market volatility and inflation, it is less common to account for an early retirement – even though it is, in fact, common.

When retiring earlier than anticipated, it may be time to consider reducing some of the risk by rebalancing the client’s portfolio to make sure they’re not over-invested in financial vehicles that are susceptible to market volatility. Adjusting a strategy to mitigate risk could include adding an annuity into their portfolio or moving money into products that allow for upside potential while limiting potential downside, such as buffered exchange-traded funds (ETFs) and annuities.

1 EBRI/Greenwald Research, 2025 Retirement Confidence Survey Fact Sheet #2, Expectations About Retirement (retirees could have retired for more than one reason)

2 Allianz Center for the Future of Retirement™ conducted an online survey, the 2025 Annual Retirement Study, in January/February 2025 with a nationally representative sample of 1,000 respondents age 25+ in the contiguous U.S. with an annual household income of $50K+ (single) / $75K+ (married/partnered) OR investable assets of $150K+.

3 Allianz Life conducted an online survey, the 2025 2Q Quarterly Market Perceptions Study, in May 2025 with a nationally representative sample of 1,003 respondents age 18+.

4 Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, June 2025, Unemployed people by age, sex, race, Hispanic or Latino ethnicity, marital status, and duration of unemployment.

The Allianz Center for the Future of Retirement™ produces insights and research as a part of Allianz Life Insurance Company of North America.

Investments are subject to market risk, including the possible loss of all principal.

Annuities and life insurance are issued by Allianz Life Insurance Company of North America, 800.542.5427 www.allianzlife.com. In New York, annuities are issued by Allianz Life Insurance Company of New York, www.allianzlife.com/new-york. Registered index-linked annuities are distributed by their affiliate, Allianz Life Financial Services, LLC, member FINRA, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297.

Only Allianz Life Insurance Company of New York is authorized to offer annuities in the state of New York.

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