Most financial experts who study retirement will agree that working longer is an excellent way to improve a person’s retirement outlook. The longer one works, these experts remind us, the more they can save, the later they can take Social Security, and the better off they are mentally and emotionally. After all, the old saying goes, if you are what you do, then when you don’t – you aren’t.

So, yes, working longer may be a viable strategy for a healthier retirement. There’s just one problem: as strategies go, it’s an unpredictable one. You might have every intention of staying in the saddle at your workplace until age 68 or 70 or beyond. But working that long might turn out, for a variety of reasons beyond your control, to be impossible.

Late last year, we came across this article on the CNBC website in which reporter Greg Iacurci examines the data on working longer before you retire. His conclusion: working longer may be a good idea, but it’s not an especially good retirement plan. Let’s see why he feels that way and what your back-up strategy should be.

Working Longer Isn’t a Strategy You Can Count On

“Working longer is among the best ways to ensure you don’t outlive your retirement savings,” Iacurci begins. “The problem is, you can’t count on it as a strategy.”  The reason is simple: the ability to work longer depends on many elements over which you have no say.

“When it comes to retirement age,” he writes in CNBC, “there’s a big gap in expectations versus reality. Americans generally retire earlier than planned — often due to factors beyond their control, such as poor health or job loss, research shows.”

Working Longer: a 4-Year Gap Between Expectation and Reality

To make his point, Iacurci cites a Gallup survey showing that, in 2022, the average expected retirement age was 66.  “But the actual retirement age was 62, on average,” he writes. Although the precise numbers tend to vary over the years, says CNBC, “there has been a consistent gap of about five years between expected and actual retirement ages since 2002, Gallup said.”

Indeed, workers these days need to realize that they’re as likely to retire early as they are to keep working past retirement age. “Almost half, 46 percent, of retirees said they left the workforce earlier than planned, according to the Employee Benefit Research Institute’s 2023 Retirement Confidence Survey,” Iacurci writes. “That share has been similar for the past two decades, largely hovering between 40 percent and 50 percent.”

These harsh statistical realities should force us all to re-think our over-reliance on plans to keep working. Iacurci spoke with David Blanchett, head of retirement research at a division of Prudential Financial. “I think a lot of people who aren’t on track [for retirement] — maybe they’re in their late 40s or early 50s — say, ‘I want to retire at 65 but I’ll work to 70,’” Blanchett told CNBC. “But they probably won’t make it to 70.”

The Impact of Working Longer Can Be “Dramatic”

Blanchett confirmed the notion that working past retirement age – for those able to do it – brings significant benefits. Iacurci writes, “Delaying retirement by just a few years can have a ‘dramatic’ positive financial effect, Blanchett said.”

Some of the reasons are obvious. Workers continue to get a regular paycheck, so their savings can remain intact. “They have extra time to save and for their assets to (hopefully) grow,” says Iacurci. “Further, they can likely delay claiming Social Security benefits, guaranteeing a higher monthly payout for the rest of their lives.” (Benefits grow by about 8 percent annually for each year of delay between age 62 and 70.)

That’s not to mention the psychological benefits of staying active longer in a job you enjoy.

If Working Longer Isn’t an Option: The Other Side of the Coin

But if working longer has significant benefits, retiring earlier than anticipated can have the opposite impact, experts said. “Largely,” says Iacurci, “this disproportionately affects people who plan to retire in their early 60s or later, according to Blanchett’s research.”

Blanchett published a research paper with the unwieldly title, The Impact of Retirement Age Uncertainty on Retirement Outcomes. But while the title sounds scholarly, the message is clear. “Research suggests people tend to retire earlier than expected,” says Blanchett. “Retiring early can have a significant (negative) impact on a retiree’s likelihood of achieving retirement success.”

According to CNBC, people who plan to retire after age 61 tend to make it about halfway toward their goal, Blanchett’s research shows. “For example,” Iacurci’s article explains, “someone who aims to retire at 69 would actually retire around age 65.” Again, this reality needs to be part of our retirement planning.

Unforeseen Events Make Working Longer Impossible

The CNBC article brings home the clear gulf between expectation and reality. As Iacurci explains, “One-third of workers expect to retire at age 70 or later — or not at all, according to EBRI. But only 6 percent of retirees said they did retire at 70.”

Why? According to the EBRI, there are two big reasons. About one-third of those who retired earlier than planned did so because of a hardship like a health problem or disability. For a slightly smaller percentage of workers, changes at their company made it impossible to stay employed. “The key is, these are things you aren’t going to be able to control,” Blanchett told CNBC.

The good news, of course, is that almost half of retirees said they were able to stop working at about the time they planned, says the article. The question becomes, which half do you want to be part of?

Working Longer May Require a New Approach

“Working longer is in theory a good option to shore up your retirement savings,” Richard Johnson of the Urban Institute told CNBC.  “But when workers are preparing for retirement, they shouldn’t bet to be able to stay in their jobs for as long as they want.” Johnson co-authored a comprehensive 2018 Urban League study on the lack of employment security among seniors.

But there’s definitely hope for seniors willing to take a fresh approach. Working longer might not mean staying with your current company. “Today’s strong labor market means it may be easier for older workers to find a new job,” Iacurci writes. “However, it’s unclear how long that strength will last.”

One answer may lie in today’s new economic options. “It may also be easier for many retirees today, especially those who can work from home, to find part-time gigs to help blunt the financial impact of earlier-than-expected retirement from full-time employment,” the CNBC article concludes.

Breaking News: Rajiv’s New Book is Here!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

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Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

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(originally reported at www.cnbc.com)