Americans are retiring earlier (but not by choice): What’s really going on?

Key takeaways

• Most Americans who retire early do so not because they choose to, but because health problems, job loss, workplace restructuring, or caregiving obligations forced their hand. Survey after survey finds the same pattern: workers plan to retire at 66, and the majority end up leaving years earlier than expected for reasons they did not control, per the EBRI and the Transamerica Center for Retirement Studies.
• Health is the leading driver, affecting nearly half of all involuntary early retirees. The Transamerica Center for Retirement Studies’ 2024 retiree survey found that 46 percent of early retirees cited personal health reasons for their timing, including physical limitations, disability, and illness.
• Job loss and organizational changes together accounted for 32 percent of early exits among those who left sooner than planned, per the Transamerica survey. The Transamerica survey found that 16 percent attributed the timing to job loss and another 16 percent to organizational changes within their employer.
• Unpaid caregiving obligations push millions of workers out of the labor force. The Bureau of Labor Statistics reports that 38.2 million Americans provided unpaid eldercare in the 2023 to 2024 period, a responsibility that falls disproportionately on workers in their 50s and 60s.
• Claiming Social Security benefits five years before one’s full retirement age carries a permanent 30 percent reduction. While a worker might choose to stop working at age 62, filing for benefits at that time is what triggers the penalty. For example, according to the SSA, a worker whose full benefit would be $2,000 per month at age 67 will see that check permanently cut to $1,400 per month for the rest of their life if they choose to claim at 62. That reduction does not reverse, regardless of when they actually stopped working.

When workers are surveyed about their retirement plans, the numbers look orderly. Gallup’s Economy and Personal Finance survey consistently finds that the average American worker expects to retire around age 66. The plans are measured and forward-looking. The outcomes are something else entirely.

The Employee Benefit Research Institute’s 2025 Retirement Confidence Survey, the most recent available, found that only 9 percent of retirees actually stopped working at 70 or later, despite 30 percent of workers expecting to do so. Twenty-seven percent left before age 60. The gap between what workers expect and what retirees actually experience is not a rounding error. It is a structural pattern that has appeared in every major retirement survey for decades. And the research is consistent about why: for most people who retire earlier than planned, the decision was not fully theirs to make.

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The scale of involuntary early retirement

The EBRI’s 2024 Retirement Confidence Survey, which examined early retirement reasons in greater depth than the 2025 edition, found that half of all retirees said they retired earlier than expected. Among that group, nearly seven in ten said the reason was outside their control. That figure places involuntary early retirement not as an edge case but as the dominant pathway out of the workforce for American retirees.

It is worth being precise about what that means. The same survey found that two in five early retirees said they could afford to stop working when they did. But being able to afford to retire and choosing to retire are not the same thing. The Transamerica Center for Retirement Studies, which surveyed retirees separately using different questions, found that only 21 percent of early retirees attributed their timing to financial readiness. These are different surveys asking different things, and the gap between their numbers reflects that. What both consistently show is that health, job circumstances, and caregiving pressures drive early retirement far more often than financial preparation does.

Health and the physical limits of work

The most common single reason workers exit the labor force earlier than planned has nothing to do with money. It has to do with the body.

The Transamerica Center for Retirement Studies’ 2024 “Retiree Life in the Post-Pandemic Economy” report found that 46 percent of early retirees cited personal health reasons for their timing. Within that group, 33 percent cited physical limitations or disability and 28 percent cited ill health specifically. These two subcategories overlap in some respondents, which is why the combined figure is 46 percent rather than the sum of the two. Either way, nearly half of all early retirees trace their departure to something going wrong physically.

The Bureau of Labor Statistics provides the structural context. The Disability Supplement to the Current Population Survey, based on July 2024 data and released in September 2025, found that 30.7 million Americans aged 16 to 75 had a work-limiting health condition, representing 12.4 percent of that population. For workers in physically demanding occupations, those limitations accumulate over decades. For workers in all fields, a sudden health event can render continued employment impossible within weeks. A cardiac episode, a cancer diagnosis, a serious injury: none of these announce themselves on a retirement planning timeline.

The financial consequence of a health-driven early exit arrives immediately and is often permanent. A worker who intended to work until 67 but stops at 62 because of illness faces the immediate loss of five years of earnings and retirement contributions. This sudden income gap often creates intense financial pressure to claim Social Security benefits early just to cover living expenses. 

If forced to file at age 62, the worker locks in a 30 percent permanent reduction in their monthly checks under the SSA’s benefit reduction schedule, a financial penalty driven by necessity, not by law. It’s also worth noting that claiming Social Security while retiring early (at age 62) will result in a permanent reduction in monthly benefits. 

Job displacement and workplace ageism

Not every early exit involves a health crisis. A significant share involves a job market that becomes progressively less hospitable to older workers.

The EEOC enforces the Age Discrimination in Employment Act, or ADEA, which prohibits employment discrimination against workers aged 40 and older, covering hiring, firing, promotions, layoffs, compensation, and all other terms of employment, per the EEOC. The law’s existence reflects a documented reality. Older workers face disproportionate barriers in the labor market: reduced consideration for promotions, exclusion from training programs, and disproportionate targeting in workforce reductions.

However, the ADEA doesn’t always work perfectly and is often difficult to enforce.. Unfortunately, the existence of the law has not eradicated the problem. In reality, older workers still face disproportionate barriers in the labor market. Because age bias is frequently subtle and difficult to prove legally, older employees continue to find themselves passed over for promotions, excluded from training programs, and disproportionately targeted during corporate layoffs.

A worker who loses a job at 58 does not simply re-enter the labor market on equal terms. The combination of age-related bias, skill-gap perceptions, and employer benefit cost calculations can make re-employment at a comparable salary and seniority level genuinely difficult.

Go Further: The EEOC’s dedicated age discrimination page at eeoc.gov/age-discrimination describes what the ADEA covers, how to identify potential violations, and how to file a charge. Workers who believe they have experienced age-based discrimination in hiring, termination, or any other employment decision have the right to file a charge at no cost.

Caregiving as an invisible exit ramp

The third major driver of involuntary early retirement is the least visible in aggregate labor statistics. Unpaid family caregiving for aging parents, spouses, or other relatives pulls workers out of the labor force at a rate that rarely appears in any single job separation figure.

The BLS American Time Use Survey for 2023 to 2024 found that 38.2 million Americans provided unpaid eldercare, representing 14 percent of the civilian noninstitutional population aged 15 and over. On any given day, 28 percent of those caregivers spent an average of 3.9 hours on that care. According to AARP, 70 percent of working-age caregivers are in the workforce.

For workers managing full-time employment alongside a significant caregiving obligation, the combination frequently becomes unsustainable. Reduced hours, career interruptions, or full workforce exit follow, often without any job loss or health event triggering the departure on paper.

The impact is amplified for workers who are simultaneously approaching retirement age, dealing with their own emerging health limitations, and supporting an aging parent or spouse. These intersecting pressures do not appear in most retirement surveys as a clean category. They are embedded in the “reasons outside my control” that EBRI consistently documents across years of Retirement Confidence Survey data.

The financial consequences of early exit

What makes involuntary early retirement particularly consequential is that it compounds across multiple financial dimensions at once.

A worker who leaves at 62 instead of 67 loses five years of earnings and employer retirement plan contributions. Savings get drawn down earlier than planned, cutting the account’s compounding runway. And, as previously stated, if Social Security is claimed at the same time, the monthly benefit is permanently reduced. 

For a worker born in 1960 or later, claiming at 62 produces a 30 percent reduction in monthly benefits compared to waiting until the full retirement age of 67, per the SSA. A $2,000 monthly benefit at 67 becomes $1,400 at 62. Every COLA increase applied in subsequent years is applied to that reduced base. The gap between the planned benefit and the actual benefit never closes.

Stopping work and claiming Social Security are two separate decisions. A worker who exits the workforce involuntarily at 62 is not required to claim at the same time. Delaying the claim, even by a few years, significantly increases the eventual monthly benefit. The practical challenge is having enough income or savings to bridge the gap between workforce exit and claiming.

How a financial advisor can help

Workers in their 50s who are exposed to any of the risk factors described above, including health vulnerabilities, employment in industries with high restructuring rates, or active caregiving obligations, may benefit from financial planning that accounts explicitly for an earlier-than-planned exit. A qualified financial advisor or tax professional with experience in retirement income planning can model retirement scenarios across different age ranges, assess the financial impact of early exit on Social Security benefits and savings runway, and identify strategies for managing the gap between workforce departure and Medicare eligibility at 65.

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FAQs

If someone is forced to retire early, can they still delay Social Security to increase the benefit? 

Yes. Stopping work and claiming Social Security are two entirely separate decisions. A worker who exits the workforce at 62 is not required to claim benefits at the same time. Delaying the claim, even by a few years, reduces the permanent reduction applied to the benefit. Delaying past full retirement age earns delayed retirement credits of 8 percent per year up to age 70, per the SSA. The practical challenge is having sufficient income or savings to cover the gap between workforce exit and claiming.

What is the ADEA and how does it protect older workers? 

The Age Discrimination in Employment Act of 1967 prohibits employment discrimination based on age against workers who are 40 or older. Enforced by the EEOC, the ADEA covers all aspects of employment, including hiring, firing, compensation, promotions, layoffs, and training. It applies to private employers with 20 or more employees, state and local governments, employment agencies, and labor organizations, per the EEOC. Workers who believe they have experienced age-based discrimination may file a charge at no cost.

Does early retirement affect Medicare eligibility? 

Medicare eligibility begins at age 65 regardless of when a worker retires or claims Social Security, per the SSA. A worker who stops working at 62 must arrange alternative health coverage for the three years until Medicare eligibility. COBRA continuation coverage may be available for up to 18 months following job-based coverage. After that, coverage through an ACA marketplace plan or a spouse’s employer may apply. The interaction between early retirement timing and health insurance coverage is one of the most practically significant planning considerations for workers who exit the workforce before 65.

Glossary

• Age Discrimination in Employment Act (ADEA). A federal law enacted in 1967, enforced by the EEOC, that prohibits employment discrimination against workers aged 40 and older. Covers hiring, firing, compensation, promotions, layoffs, and all other terms and conditions of employment. Applies to private employers with 20 or more employees, state and local governments, employment agencies, and labor organizations.
• Delayed retirement credits. Monthly increases to a Social Security retirement benefit earned by a worker who delays claiming past their full retirement age. The credit rate is 8 percent per year for workers born in 1943 or later. Credits stop accruing at age 70, per the SSA.
• Full retirement age (FRA). The age at which a Social Security beneficiary becomes eligible to receive 100 percent of their Primary Insurance Amount. For workers born in 1960 or later, FRA is 67, per the SSA.
• Involuntary early retirement. Workforce exit that occurs earlier than a worker planned, driven by factors outside the worker’s control, including health problems, job loss, organizational changes, or caregiving obligations.
• Work-limiting health condition. A health condition or difficulty that limits the amount or kind of work a person can perform, as defined by the Bureau of Labor Statistics in its Disability Supplement to the Current Population Survey.

Sources

• AARP – Exclusive: AARP-NAC Report Finds 45% Increase in Americans Providing Care: https://www.aarp.org/caregiving/basics/caregiving-in-us-survey-2025/
• EBRI – 2024 Retirement Confidence Survey: https://www.ebri.org/docs/default-source/rcs/2024-rcs/2024-rcs-release-report.pdf
• EBRI – 2025 Retirement Confidence Survey Fact Sheet: https://www.ebri.org/docs/default-source/rcs/2025-rcs/rcs_25-fs-2.pdf
• Transamerica Institute – Retiree Life in the Post-Pandemic Economy, 2024: https://www.transamericainstitute.org/docs/research/retirees/retiree-life-post-pandemic-economy-survey-report-2024.pdf
• BLS – People with Health Conditions or Difficulties That Limit Work, July 2024. (July 2024 data, released September 2025): https://www.bls.gov/news.release/dissup.htm
• BLS – Unpaid Eldercare in the United States, 2023-2024: https://www.bls.gov/news.release/elcare.htm
• SSA – Retirement Age and Benefit Reduction: https://www.ssa.gov/benefits/retirement/planner/agereduction.html
• SSA – Delayed Retirement Credits: https://www.ssa.gov/benefits/retirement/planner/delayret.html
• EEOC – Age Discrimination: https://www.eeoc.gov/age-discrimination
• EEOC – Facts About Age Discrimination: https://www.eeoc.gov/fact-sheet/facts-about-age-discrimination
• Gallup – In U.S., Expected Retirement Age Steady at 66: https://news.gallup.com/poll/514677/expected-retirement-age-steady.aspx

SteadyRetire is a retirement education platform offering practical financial resources and access to a financial advisor matching service. This article is intended for informational and illustrative purposes only and does not constitute financial, legal, tax, or investment advice. The information provided does not create a professional-client relationship and should not be used as a substitute for consultation with a qualified financial advisor, tax professional, or attorney. While we strive to provide accurate and up-to-date information, rules and regulations regarding retirement are subject to change. Always consult with a certified professional regarding your specific financial situation.

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