Despite the gloomy economy, some workers are convinced they'll be able to retire early. About 21 percent of workers surveyed told Transamerica Center for Retirement Studies they intend to retire before age 65.
What's the secret to their optimism when the remaining 79 percent of workers expect to work past age 65, and 49 percent aren't very confident they'll ever be able to retire comfortably?
Education is one factor -- 52 percent of potential early retirees are college graduates. Youth is on their side -- 50 percent are younger than 40. Nearly half -- 49 percent -- have annual household incomes of less than $100,000, which means they already understand fiscal discipline.
Otherwise, this group intends to accomplish this retirement planning feat by following very conventional financial strategy, according to Catherine Collinson, president of the Transamerica center. Here, culled from the center's survey, are the six factors these optimists believe will earn them early financial security:
- Knowledge is key. About 71 percent say they manage their savings aggressively with 34 percent saying they know “a great deal” or “quite a bit” about investment theory. They've been studying up on government benefits, too, with 46 percent professing to know “a great deal” or “quite a bit” about the Social Security benefits they may receive.
- Make a plan and work it. The same number as those managing their money aggressively -- 71 percent -- also are planning aggressively. They have a vision for their retirement -- 52 percent have put their plan in writing, including calculating what it will cost.
- Take full advantage of employer-sponsored retirement plans. This is a survey of working people, so in the first place, these people have survived the economic downturn relatively unscathed with 75 percent currently participating in an employer-sponsored retirement plan. About half -- 45 percent -- say they'd take a job that paid only their minimum salary expectations if the retirement plan that went with it was generous.
- Earlier is better. At least half started saving by age 25 and more than 50 percent are saving more than 10 percent of their incomes.
- Work and save. About 71 percent said the nation's fiscal downturn had not caused them to save less. And 70 percent are also saving money outside of their retirement plans.
- Keep an ace in the hole. Nearly 30 percent of these potential early retirees have a backup plan in the event they are unable to work before their planned retirement. But even if they retire according to their plan, 45 percent say they intend to work part-time after they retire and 39 percent plan to do that until they are age 70.