Many retirement savers say they are willing to save more during their working years and even delay retirement as long as they don’t have to downsize their lifestyle after they leave the workforce. Some 40 percent of Americans are willing to bump up their retirement savings and 46 percent plan to either delay retirement or work during retirement, according to a Charles Schwab and Kelton Research telephone survey released yesterday. But just 5 percent of those surveyed are willing to spend significantly less than they do now in retirement.
Most of the savers say they have recently become more proactive in planning for retirement due to the economic downturn (55 percent) or after hearing about the experiences of a friend or loved one (41 percent). Other financial motivators included having children (39 percent), a personal financial crisis (30 percent), a health scare (35 percent), or a death in the family (20 percent).
Young investors in their 20s and 30s are the most focused on bumping up their retirement account contributions, while baby boomers between the ages of 55 and 64 are more likely to delay retirement. Almost half of seniors age 65 and older (47 percent) say they are considering working during the traditional retirement years.
The survey respondents are looking forward to working less and having more time to relax in retirement (43 percent) and the opportunity to begin a new chapter in life (28 percent). And those goals don’t include clipping coupons and cutting expenses after they leave the workforce.
[Find out What Retirees Do All Day.]
The goods and services Americans spend money on generally change upon retirement. Seniors typically manage to eliminate some expenses in retirement, such as transportation to the office and expensive work attire, but often end up spending more of their budget on healthcare and travel expenses than they did while working, according to the most recent Consumer Expenditure Survey from the Bureau of Labor Statistics. “Sometimes people spend more post-retirement than pre-retirement,” says Deanna Sharpe, an associate professor of personal financial planning at the University of Missouri, who is not affiliated with the Schwab study. “What we can’t say is that people will spend drastically less unless they are very highly paid.”