Work is the New Retirement

Workers give up on the idea of a leisurely retirement and think about part-time jobs

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Forget about early retirement. Most Americans now plan to stay employed as long as they are able to work or can hold on to a job. A recent Bankrate, Inc. and Princeton Survey Research Associates International phone survey of 1,003 adults age 18 or older conduced in September found that 75 percent of Americans plan to work as long as they can because they enjoy work (39 percent), need the money (32 percent), or for both reasons.

Retirement is simply getting pushed farther into the distance. Today's generation plans to work as long as possible, a far cry from that of previous generations, says Julie Bandy, editor-in-chief of Bankrate.com. “Falling home values and losses in retirement accounts are forcing many Americans to re-evaluate their retirement needs." Less than a third (31 percent) of employees are still following their original retirement plan, while 40 percent plan to postpone retirement and another 18 percent say they will probably never be able to retire.

[See Deciding When to Delay Retirement.]

Investing strategies, however, have largely stayed the same. Some 53 percent of Americans made no changes to their portfolio due to the financial crisis compared to just 14 percent who recently developed a more conservative investment approach either by completely getting out of stock market (5 percent) or putting more money in bonds, CDs, or Treasuries (9 percent). Only 3 percent of workers saw the market drop as an opportunity to buy stock and stock mutual funds at discount prices.

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Most Americans are completely on their own for retirement planning. Only about a quarter (27 percent) of workers consult a financial adviser for investing decisions. The rest use a variety of strategies to invest their nest egg including an asset allocation plan (16 percent), picking mutual funds based upon performance (15 percent), and using a target-date fund (8 percent). About 18 percent of those surveyed don’t invest in a retirement plan and 9 percent don’t use any investment strategies.

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Yet, few retirees have reentered the workforce. Only 5 percent of current retirees are employed, the survey found. But most retirees (55 percent) worry about money and wish they had saved more while they were working. Social Security is the only source of income for 26 percent of the retirees. And the financial crisis has forced about a quarter of retirees (24 percent) to withdraw more money from their savings this year than they had been previously. Only 38 percent of the retirees think they have enough money saved to remain retired without financial worries.