Workers want to retire at 55, but are they positioned to successfully do so?

The category of “pre-retirees” is being redefined as more than one-third of workers younger than 54 saying they aspire to retire by age 55.

In 2020, more consumers (39 percent) anticipated retiring before age 65 than in any year since in 2010, with 18 percent of those saying they plan to retire by age 59, according to the research firm Hearts & Wallets.

At the same time, interest in part-time work declined. In 2020, more Americans want to stop full-time work at a certain age, now at 33 percent, up 2 percentage points from 2019. Conversely, 53 percent of Americans want to “work full time as long as health permits,” up 3 percentage points from 2019.

Workers who say they want to stop full-time work by age 55 are well positioned in some ways but may need assistance to achieve their early retirement goal, the study found, These households are more likely to use various investment products, have lower student debt, spend less on housing and are more open to personal financial advice.

Their saving rate and other financial behaviors, such as carrying credit card debt, suggest an early retirement goal may be unrealistic without behavioral change.

Future retirees anticipate a higher number of income sources than current retirees. Nearly half of future retirees expect four-plus sources of income, with even more sources for wealthier future retirees. The average retiree household has 2.4 sources of income. The more income sources consumers anticipate, the more value they see in paying for financial advice.

“More income sources allow retirees to weather inflation, stock market volatility and other nest-egg pressures,” said Amber Katris, Hearts & Wallets subject matter expert.

“Firms should understand which sources matter most to individual consumers. Consumers with a higher number of income sources are more receptive to paying for financial advice. Consider assets-to-income ratios, which are more concrete and easier to understand than replacement- rate projections.”

The study also found that participation and saving in employer-sponsored retirement plans were up in 2020. “To save for retirement” and “to get the company” match are the main reasons for participating.

Having “reliable choices screened by my employer” is less important nationally but relatively more motivating to Black participants in comparison to Asian or white participants.

More-generous plan matches increase overall household saving rates, especially at lower income levels.

This finding indicates matches should be differentiated by income, which has myriad implications for those who work with employer-sponsored retirement plans and public policy.

“The pandemic has disrupted many lives and jobs,” said Laura Varas, CEO and founder of Hearts & Wallets. “One repercussion is a renewed appreciation for building financial security and planning for possible end of work. Firms should assist consumers in understanding their personal work viability and provide support to achieve retirement goals without making assumptions about target dates, either earlier or later than the traditional mid-60s.”