Many Baby Boomers (those born between 1946 and 1964) have been saying for years that they plan to delay retirement until 70 years old or later, but reality is sinking in as they actually approach 70. Retirement age is increasing, but it's still a lot younger: A 2014 Gallup poll found that the average retirement age rose from 60 to 62. All the same, about 40% of Boomers still in the workforce expect to delay retirement until after age 69, if at all, according to a recent Bankers Life study. The question is, will they be able to do this?

In its May 2013 report, “The Oldest Boomers,” MetLife reported that life has a way of changing plans. While Boomers say they had wanted to retire at age 71, up from 69 in 2011, more than half the oldest Boomers (those now 66) were already retired, five years earlier than planned. The key reasons why plans changed for them are health challenges and job loss.  

The Great Recession Hits Retirement

Matthew Rutledge, research economist at the Center for Retirement Research at Boston College, believes that the Great Recession is a big reason for the disconnect between plans and actuality. “Financial markets have recovered, but if investors had to cash out to support themselves – or got skittish and bailed out – they may have missed out on that recovery, which means they may not have the financial resources to stop working,” he says. Additionally, workers who “experienced a long jobless spell but were lucky enough to find re-employment probably want to make up for the resources they depleted” by staying on the job. 

This doesn’t always work because job hunting becomes much more difficult when you are over 55. Rutledge found that jobless individuals age 62 or older give up on seeking work about a year after losing a job. Yet the ADP Workforce Vitality Report for the second quarter of 2015 found an increase in employment among employees aged 55 and older.  

David R. Fink, CFA, CFP, regional vice president of Halliday Financial in Sarasota, Fla., witnessed a number of people who experienced significant losses in their investment portfolios or in the value of their homes during 2008-2009. "Many in this situation are planning to work as long as possible to increase their savings as much as possible," he says. For others, the crisis had "more of a psychological impact than a financial impact. This group has the ability to achieve an early retirement, but they want to keep working 'just in case.' They are so concerned that there is another shoe to drop that they do not want to risk having to come back out of retirement once they have actually retired."

Why Some Baby Boomers Retire Late

Only time will tell when Boomers actually end up retiring. Let’s look at the key reasons they cite for delaying retirement. 

Savings Many retirees haven’t saved enough and want to continue working to build up their nest egg. Workers age 50 and over can put up to an extra $6,000 in a 401(k) or similar plans each year and an extra $1,000 in an IRA.  

Reducing retirement years  Most Boomers expect to live for 20 to 30 years in retirement; a nest egg would need to be pretty large to support someone for that long. Retiring later shortens the time during which they will need to draw from retirement savings.

Increasing Social Security benefits Delaying Social Security can have a big impact on a retiree's monthly check. Every month Boomers delay retirement past the age of 66, their benefits increase. If they wait until age 70, their Social Security benefit checks will be 32% higher than they would have been at age 66. 

Social life For many people, their friends at work provide their social interaction. Many delay retirement to stay active and involved with their peers. (For more, see Is Working Longer a Viable Retirement Plan?)

Why Others Retire Earlier Than Expected

Health A health issue that makes it impossible to continue working is a major reason people must change their minds about delaying retirement. 

Job loss When people older than 55 lose a job, they frequently find it difficult to get a new one. 

Care of a sick partner or parent Some Boomers stop working to care for a sick parent or partner. This can create additional financial challenges for retirement. 

“Long-term care alone can devastate anyone’s retirement plan," cautions Carlos Dias, Jr., a wealth manager at Excel Tax & Wealth Group in the Orlando, Fla., area. "Essentially, retirees can deplete their retirement accounts in a matter of years even if the account has $1 million. With the average cost of $39,516 per year for assisted living and between $74,820 and $83,580 for nursing home care, these accounts can be depleted in under 25 years (not counting supplemental income withdrawals).”  He adds that, “according to the U.S. Department of Health and Human Services, someone turning age 65 today will have almost a 70% chance of needing some form of long-term care." 

Working Part Time or Starting a Business

Many seniors change their mind after retirement. In this new movement – known as “unretirement” – seniors decide to go back to work, but not necessarily in the field in which they were employed all their lives. Many are choosing to find work related to their passion or to start their own businesses. Others seek part-time work for social interaction and a little extra cash, but don’t want the responsibilities a full-time job entails. (For more, see Working in Retirement While Collecting Social Security?)

This writer lives in a 55+ community near Disney World and knows many seniors who work in the parks two or three days a week. The pay is near minimum wage, but the work can be fun if you enjoy spending the day with children. Even better, the ticket benefits allow them to take their own children and grandchildren to the parks for free when they visit.

Others in the community supplement their fixed income by starting a service business, such as cutting hair or doing minor home repairs. Still others fulfill their passions in the arts and sell their work.

"Someone can look to start a business in retirement, but we would caution them against putting up a significant amount of personal financial capital in order to start the business," says Mark Hebner, founder and president of Index Fund Advisors, Inc. in Irvine, Calif. "Finding part-time work can help to supplement Social Security and retirement savings." This avoids risking your retirement savings.

The Bottom Line

Baby Boomers are changing retirement. Exactly how, though, is still evolving as their long-range planning come up against the unpredictable realities of life.