Most people make this retirement mistake. You might still have time to fix it.

By Robert Powell

Are you prepared for the retirement you might get?

Retirement isn't easy - and for many workers and retirees, it's getting harder.

This might not come as a surprise to the geeks who eat, breathe and sleep all things retirement. But the latest survey from the Society of Actuaries Research Institute shows, among other things, that man plans (or at least plans for some things) and God laughs.

According to the survey, nearly 6 in 10 (59%) of retirees said they left the workforce earlier than planned, while onyl 6% retired later than expected. Health changes were a leading driver of early retirement among lower-income individuals.

Those findings echo research from the Employee Benefit Research Institute and J.P. Morgan Asset Management.

The implication of the research is this: If you're planning to retire at 65 or 67, it may be time to go back to the drawing board and stress test your plan. It isn't just whether you can afford the retirement you want - it's whether you've prepared for the retirement you might get.

The survey also found:

-- 29% of preretirees experienced a family emergency that required them to tap 10% or more of their savings.-- 35% of preretirees and 29% of retirees said they are likely to need caregiving in the future, yet nearly half have made no plans for it.-- Nearly one-third of preretirees provide financial support to adult children, while nearly 1 in 5 support aging parents or in-laws, limiting their ability to save for retirement.

One thing we know: Retirement isn't easy. And for many workers and retirees, it's getting harder.

'Many people don't fully appreciate how vulnerable the final working years can be.'Melissa Caro

Start with confidence levels. In the most recent Employee Benefit Research Institute Retirement Confidence Survey, just 25% of retirees said they were very confident they would have enough money to live comfortably throughout retirement. Among workers, the share was even lower - roughly 15% to 18%.

At the same time, workers appear to be saving less. Research from Dayforce found that full-time workers reduced their average 401(k) contribution rate in 2025 to 8.9%, from 9.2% the year before - the first decline since the company began tracking the measure. Only about half of workers were saving in a 401(k) or similar workplace retirement plan at all. Loans and hardship withdrawals are also rising as more workers tap retirement savings to cover emergencies.

Read: Don't dip into your 401(k) for emergency cash without weighing these costs

Traditional pensions continue to disappear: Defined-benefit pension coverage among private-sector workers has fallen from roughly 35% in the early 1990s to about 14% in 2025.

At the same time, Americans are living longer, so retirement savings may need to last decades. According to the Social Security Administration, a 65-year-old man today is expected to live to about 83, while a 65-year-old woman is expected to live to nearly 86.

Then there's the question of how those years get funded. Congressional Budget Office projections show the Social Security Old-Age and Survivors Insurance trust fund could be depleted by 2032, potentially triggering a 28% reduction in benefits if lawmakers fail to act.

Healthcare costs also continue to climb for workers and retirees alike. According to KFF, the average annual premium for employer-sponsored family health coverage reached nearly $27,000 in 2025. And according to Fidelity Investments, a 65-year-old who retired in 2025 could expect to spend about $172,500 on healthcare and medical expenses throughout retirement. For couples, the estimate rises to roughly $345,000.

Many are trying to navigate all of this while stuck in the financial squeeze of the "sandwich generation": More than half of Americans in their 40s are helping aging parents while also raising children or financially supporting adult children.

So retirement planning isn't happening in a vacuum - it's happening while people are trying to survive real life.

One of the biggest mistakes people make is treating retirement as a straight-line plan.

"In reality, life interrupts the timeline all the time," said Melissa Caro, founder of My Retirement Network. "Health issues, layoffs, caregiving responsibilities, family emergencies and financial support for others can all force adjustments earlier than expected. The finding that nearly 60% of retirees left the workforce earlier than planned is important, because many people don't fully appreciate how vulnerable the final working years can be."

Someone may intend to work until 67 or 70, she noted, but a health issue, downsizing or caregiving responsibility at 62 or 63 can accelerate retirement - whether they feel financially ready or not.

"That's why retirement planning shouldn't only focus on an ideal retirement date," Caro said. "People should also stress test their plan against a scenario where they stop working two to five years earlier than expected."

Could they reduce expenses? Work part time? Delay claiming Social Security? Maintain health coverage? "Those questions matter," Caro added.

Opinion: Inflation will likely be higher for longer. Your retirement plan isn't built for that.

What should workers do?

People should "plan to retire at age 62, and when you reach 62 you can always decide to work longer," said Catherine Valega of Green Bee Advisory. "Which I think is better for most people anyway."

Far too often, discussions with a financial adviser are investment-focused. "That's only one facet of the retirement puzzle," said Ryan Noble, a certified financial planner with Prosperity Planning.

One overlooked risk is delaying retirement out of fear. "An effective planner will analyze prudent risks, model different scenarios, and help clients determine a reasonable retirement age and spending level that gives them confidence to actually make the decision," Noble said.

Others suggest planning for the harshest of scenarios.

Jeffrey Judge of Chesapeake Financial Planners said he works with clients who are living out exactly what the Society of Actuaries survey describes - and he argued the numbers may actually be optimistic.

"The early-retirement finding is the one that should shake people," Judge said. "Most clients don't plan to retire at 58 or 59; they plan to retire at 65. But a health scare, a layoff, a parent who needs care - and suddenly that timeline collapses."

The money, he said, then has to stretch far longer than the spreadsheet assumed.

"The gap between 'when I planned to stop working' and 'when I actually stopped' is where most retirement failures happen, and 59% of retirees crossing that line is not a rounding error," Judge said.

So what should people do?

First, plan as if retirement will happen five years earlier than expected.

"Run the numbers at 60, not 65," Judge said. "If the plan still works, great. If it doesn't, that's the conversation you need to have now, not after the health scare."

Second, shore up emergency reserves.

"A 29% rate of preretirees raiding 10% or more of savings for a family emergency means people are going into retirement short," Judge said. "The rule of thumb I use with clients is six months liquid [at] minimum, and that number goes up if you're carrying financial responsibility for adult children or aging parents."

Sometimes, Judge noted, his clients are supporting both at once. "And yes, it is as stressful as it sounds," he added, recalling a client who was simultaneously supporting a 28-year-old child and a 78-year-old parent.

Read: More Americans are buying homes to fit multiple generations: 'It answered a lot of prayers'

The survey finding that 35% of preretirees expect to need care someday, while nearly half have done nothing about it, reflects more than simple procrastination.

"That's avoidance," Judge said. "The conversation is hard, so people skip it."

He noted that long-term-care costs in Maryland, for instance, can run between $8,000 and $12,000 a month for memory care.

"A plan that assumes Medicare covers that is a plan built on wrong information," Judge said. "Medicare does not cover custodial care."

His advice: Get a long-term-care assessment done before age 60, if possible, because premiums are generally lower and qualification is easier.

"Once a health event happens," Judge said, "the option may be off the table entirely."

-Robert Powell

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

05-18-26 1436ET

Copyright (c) 2026 Dow Jones & Company, Inc.