Rosy Assumptions on Retirement Timing Invite Rude Financial Surprise

A new research report by Morningstar warns that assumptions about working longer can actually be detrimental if retirement comes sooner and savings fall short, reports Reuters . "What people are doing is picking unrealistic ages," said David Blanchett, head of retirement research at Morningstar and author of the report. "You might say that you want to work until 67, but a lot of things can go wrong." Most formal retirement plans are built around a specific retirement age. But health problems, job loss, or just plain burnout often produce a different outcome. Blanchett found that for anyone planning to retire after age 61, the chances of meeting income and standard-of-living goals can fall sharply if a person does not work at least to that age. "In other words, if your plan predicts a 90 percent chance of meeting your goals if you work until your late sixties, you might really only have a 60 percent chance of meeting that goal," he said.