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Most people don’t want to work their whole lives, but financial necessity leads many of us to plan on a late retirement.

A recent study from the Employee Benefit Research Institute (EBRI), however, shows that the ability to work as long as you want might be more illusion than reality. The study found workers consistently retire earlier than they predicted. Additionally, people overestimate the likelihood that they will continue working in some capacity after they retire.

Knowing that is half the battle. It's important not to count on the ability to work until age 65 or beyond to pad your savings. Here are three ways you can face an earlier-than-intended retirement with a plan in your pocket:

Start saving early and save as much as you can

Regardless of your best-laid plans, you may be forced to retire before you would like. The EBRI has found over the years that the median actual retirement age is 62, while the median age people think they will retire is 65.

Additionally, a 2018 investigation by ProPublica and the Urban Institute found 56% of people who have steady employment when they’re 50 years old were laid off or pushed out of their jobs by their employers before they planned to retire. More recently, the recession brought on by the coronavirus pandemic created bigger job losses among older folks than younger workers.

The best thing you can do in order to prepare for potential road bumps ahead is start saving for retirement early and save as much as you can.

“The bottom line is the people preparing to retire need to be clear about the facts and be honest with themselves about earlier retirement as well as increased longevity,” says Bradley Lineberger, president and founder of Seaside Wealth Management. “Both of these factors are why it’s so important to have a financial plan, a spending plan and be a diligent saver.”

If your current job offers a 401(k) plan, this is where you’ll want to put your savings first. Many employers offer matching programs, and the average match was 4.7% in 2019, according to Fidelity. While some companies suspended their match programs at the beginning of the pandemic they are starting to return.

Beyond just meeting your employer match, you should try to max out your 401(k). Workers can put up to $19,500 in their 401(k) account in 2021, and that amount goes up to $26,000 if you are over 50 years old.

If you’re looking to save even more, or if your employer doesn’t offer a 401(k), you can also contribute to an individual retirement account (IRA). The limit for yearly contributions to an IRA is up to $7,000 if you are 50 or older and $6,000 for everyone else.

Get serious about planning for your long-term health care

The EBRI report found 47% of people who decided to retire early over the past year did so because of their own health or disability. Another 34% retired to care for a spouse or another family member. With the average life expectancy of an adult in the U.S. being more than 78 years, that could mean decades of retirement. And Fidelity estimates that the average couple will need $295,000 in today's dollars for medical expenses in retirement, excluding long-term expenses like home health aides and assisted living costs.

One way to prepare for your long-term health care is with a health savings account. “Saving into an HSA is a powerful way to not only get a tax deduction now but also prepare for future health expenses down the road,” Lineberger says.

An HSA — which you may qualify for if your health insurance plan has a high deductible — allows you to make tax-free contributions and withdraw your savings and earnings for medical expenses also tax-free. The list of qualifying medical expenses is broad, including allergy relief medicine as well as diabetes care supplies and even certain Medicare premiums.

Permanent life insurance policies offer a creative way to prepare for your long-term health since you can access the money you put in as a tax-free loan. “Cash value in life insurance policies can be used for all kinds of purposes, including to help cover retirement expenses,” May Jiang, a CPA in Laurel, Maryland says. “To add more peace of mind, you can add a long-term care rider with the life insurance policy so that in the case that you’ll need long-term care, the cash value can help cover the needs.” Another option is looking into long-term care insurance as a separate policy.

Stay flexible as you plan for your final years of work

Half of people expect to keep working at least part-time during the beginning of their retirement, but only 17% of people actually do so, according to the EBRI survey. If they do go back to work, it’s typically at lower pay than earlier in their careers due to age discrimination and other factors. That reality can certainly be anxiety-inducing, but a little flexibility can go a long way in helping you figure out what role work can play in your retirement. Maybe you only need to replace a portion of your full-time salary to fund your basic living expenses, which could help you delay tapping your retirement savings or claiming Social Security.

While many people need to work in retirement to keep up with expenses, staying in the workforce comes with other positives as well, experts say. “I often encounter clients who plan to continue working well past traditional retirement age,” Andy Baxley of The Planning Center says. “I am generally in support of this plan because research has linked working longer to a variety of health, psychological, and social benefits.”

A job that is significantly different from what you did during the bulk of your career might actually be the best choice for retirees who are looking to prioritize their physical and mental health. A hobby, such as decorating or working with animals, could turn into a part-time job or be a way to expand your social circle even if you won’t be earning as much as you used to. AARP maintains a list of the most common part-time jobs for people 55 and over. You can see it here.

The good news is the EBRI found that despite the effects of the pandemic, seven out of 10 workers are still somewhat confident they’ll be able to live comfortably once they retire. A combination of preparation and flexibility can go a long way in making that a reality.

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