Here's Why More Americans Are Retiring Earlier Than They Expected

It seems counter intuitive: Of all Americans who retired since the Great Recession, more retired earlier than expected than later than expected, a new Fed report shows.

This finding appears to be at odds with everything we’ve heard about the growing need to delay retirement and -- my all-time favorite oxymoron -- work in retirement.

Yet the numbers don’t lie: 15% of those who have retired since 2008 did so earlier than planned; only 4% did so later than planned. This is according to the latest Fed data, which goes to September 2013.

The data clearly show what we all know: In order to make ends meet, workers intend to stay on the job longer, not shorter. Two in five workers 45 or older plan to delay retirement. Among pre-retirees 55 to 64 years old, only 18% expect to retire on time and stop working altogether. A quarter expects to work as long as they can and another quarter expects to work part-time or become self-employed in retirement.

Taken as a whole, this can only mean that we’ve seen a lot of forced retirements. In the lousy job market of the past few years, millions of older workers downsized out of employment couldn’t find suitable work. They retired rather than keep up the search or work for significantly less. That’s not good, and it helps explain other sobering statistics in the report.

Nearly 40% of households say they are just getting by or struggling to make ends meet, underscoring the uneven recovery. The rebound in stocks has mostly benefited the investing class. Home prices have improved, and that has helped a wider swath of the population—but not as much as you might expect. Of those who have owned their home for at least five years, about half say the value is lower than in 2008.

Meanwhile, many households are suffering from tight credit, student loans and poor retirement savings. Some of these pressures have eased in the past 12 months. The economy grew at a healthy 4% pace last quarter and mortgage lending has loosened up.

But a quarter of households have some form of student debt with an average balance of $27,840. One in five has fallen behind in payments on this debt. At the same time, 31% of workers say they have no retirement savings or pension, including 19% of those aged 55 to 64. Almost half of adults aren’t even thinking about planning for retirement. And yet, as the report shows, retirement may be coming sooner than they expect.