Allianz studies why 42% of Americans retire sooner than expected

If you won the lottery today, would you continue to work or retire?

According to the 2026 Annual Retirement Study from the Allianz Center for the Future of Retirement, part of Allianz Life Insurance Co. of North America, more than half of Americans (54%) said they would retire immediately if they won the lottery.

With the chances of winning the lottery averaging around 1 in 300 million, Americans need a better plan – particularly if they want to retire on their own terms.

The study found that most Americans worry that they will not be able to retire when they want, and more than half (57%) are concerned with not having enough money saved.

The study found that 53% of Americans retired about when they expected. More than four in 10 (42%), however, retired earlier than expected – often due to circumstances beyond their control. Only 5% said they retired later than expected.

The most common reasons for retiring earlier than anticipated were health issues that prevent performing the job (30%), an unexpected job loss (21%), and being financially ready earlier than expected (21%).

“Many people find themselves retiring early either due to their own health or needing to care for a loved one with health issues,” said Kelly LaVigne, vice president of consumer insights at Allianz Life.

“You need to make sure you’ll get as close to that target date, with a contingency plan in the event you need to retire earlier,” he added.

How to plan for the unexpected

When determining when to retire, many don’t take into account things that are beyond their control. Americans still working said the most likely reasons they would retire early would be to spend more time with family (36%), being financially ready earlier than expected (32%), and wanting to reduce stress (31%), the study found.

Retiring early is clearly an aspiration for the majority of Americans. Seven in 10 (70%) said they want to emulate the financial strategies of those who achieve early retirement.

More than one in three (35%) said they would likely decide to retire if they lost their job in the next six months. More boomers (58%) said they would likely decide to retire if they lost their job in the next six months than Gen Xers (29%) or millennials (30%). Many Americans (54%) also worry that potential cognitive decline will impact their ability to work for as long as they hope.

A financial professional can help

So how do you plan for the unexpected? A contingency fund is a good place to start, LaVigne said. Similar to having an emergency fund for six months of expenses, he said Americans need a similar plan with some type of retirement savings account.

“Put money away in a Roth IRA or a Roth 401(k) so that you can keep investing for possible growth, without increasing your tax burden,” he said. “If those options aren’t available, investing in the market to receive long-term capital gains treatment, such as in a low-cost ETF [exchange-traded fund] or buffered ETF for protection, could be a better option.”

LaVigne recommended working with a financial professional who can use planning software to develop a written plan that includes contingencies if you have to retire earlier.

Keeping your budget in check is critical.

“By doing things like taking a vacation every other year, you can put more money toward your retirement,” LaVigne said. “The good news with this is if you don’t need to retire earlier than expected, you may be able to anyway,”

Having to pay for healthcare expenses before you’re Medicare eligible can be an unforeseen problem, he added.

“The expense of healthcare can be crippling for some,” LaVigne said. “Paying for long-term care or a chronic health condition are some of the scariest things for people to consider.

“Using vehicles like fixed indexed annuities and registered index-linked annuities can help you be in the market with growth potential while also having some protection from market downturns."

The best way to save for retirement is to know what you’re spending now and to have a written plan for the future.

Regular conversations with a financial professional is the best way to plan for contingencies, LaVigne said. As Malcolm X once said, “The future belongs to those who prepare for it today."

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