A new report by the Transamerica Center for Retirement Studies has found that despite the gloomy retirement outlook among many American workers, one in five, expect to retire before age 65.
The 12th Annual Transamerica Retirement Survey found that more than half of future early retirees have a college degree, 50 percent are under the age of 40 and nearly half report an annual household income of less than $100,000 per year.
“Future early retirees are not necessarily born out of privilege or ultra-affluence. They are more likely to be everyday people and should be considered a source of inspiration to all,” says Catherine Collinson, president of The Center. “The common denominator is that the majority exhibit highly proactive savings behaviors.”
The report found that out of the individuals who expect to retire by age 65, 71 percent have a retirement strategy, started saving for retirement at a younger age (around 25) and were offered a 401(k) or similar plan by their employer (75 percent). These individuals also defer a higher percentage of their annual salary into their 401(k) or other retirement plan and 69 percent said they also save for retirement outside of work. Seventy-one percent said they are very involved in managing and monitoring their retirement accounts.
“Despite the down economy, most future early retirees have found a way to save the same or more since the recession began,” adds Collinson.
The Center’s report highlighted some important opportunities for future early retirees to improve their chances of meeting their long-term goals, including calculating a retirement savings goal, learning the basic principles of asset allocation and retirement investing, studying government benefits such as Social Security and developing a backup plan if forced into retirement sooner than expected.
The Transamerica Center for Retirement Studies is a nonprofit, private foundation. The 12th Annual Retirement Survey was conducted online within the United States by Harris Interactive on behalf of Transamerica Center for Retirement Studies between Jan. 31, 2011, and March 10, 2011, among 4,080 full-time and part-time workers who work for for-profit companies with 10 or more employees. Potential respondents were targeted based on job title and full-time and part-time status.