Even delaying retirement into their 80s, though, may not ensure that they will have enough money, according to a new study from the nonpartisan Employee Benefit Research Institute (EBRI). There is still a chance that they will be "at risk" of running short of money in retirement. But the chances of achieving financial retirement adequacy do improve significantly when people reach their late 70s and early 80s.
Participating in a defined-contribution retirement plan such as a 401 (k) after the age of 65 is a major factor separating the retirement haves from their less solvent have-nots, the study said. While retirement age and how much money people pull in before retiring play a role, participation in a defined contribution plan makes at least a 10 percentage point difference in the majority of retirement age/income combinations.
According to the study, workers who fall in the lowest quarter of earners (those learning less than $11,700 a year) would have to wait until they are 84 to ensure 90 percent of them would have a 50 percent chance of having enough money to afford retirement.
The odds improve greatly with income. By the time workers in the highest quarter (those earning $72,500 a year) reach 65, they have a 50/50 chance of being able to afford retirement.
"Our research finds that many people may have to delay retirement far beyond age 65 to increase the probability that they have enough money to cover their retirement expenses at a comfortable level," Jack VanDerhei, EBRI's research director and co-author of the report, said in a statement. "What really makes a positive difference, we found, is if people who continue to work after 65 also continue to contribute to a defined contribution retirement plan."