Retirement isn’t a universal goal among workers. Over a third of employees expect to work past age 70 or never retire, according to a new Transamerica Center for Retirement Studies survey.
Workers who plan to eventually retire are increasingly pushing back their retirement date. Some 40 percent of workers say they now expect to retire later than they did a year ago, up from 28 percent who said this in last year’s survey, the Harris Interactive online survey of 4,080 employees of for-profit companies with 10 or more workers found. However, the 60s remains the most popular decade for retirement, with just over half (54 percent) of those surveyed planning to retire then. Only 6 percent of people plan to retire before age 60.
“For workers now the plan is simply to work as long as possible and work at as old an age as possible,” says Catherine Collinson, president of the Transamerica Center for Retirement Studies. “If you expect to live to 95 and you retire at 75 versus 65, that gives you 10 additional years to generate income and save, and 10 fewer years that you need to save for.”
Retirement no longer means a permanent exit from the workforce. Even once they begin calling themselves retired, just over half (54 percent) of employees expect to continue to work at least part time. The most common reasons for working past age 65 are financial, including not having enough savings (34 percent), wanting extra income (18 percent), and needing health benefits (9 percent). However, many retirees also say they will work to stay involved (19 percent) or because they enjoy what they do (16 percent).
Workers estimate that they will need to save a median of $600,000 to feel financially secure when they retire. However, less than half (45 percent) of workers in their 60s have over $100,000 in their retirement accounts. Most workers (70 percent) think they could work until age 65 and still not have enough saved to meet their retirement needs.
However, not everyone gets to choose their retirement date. A layoff, health problem, or the need to care for a spouse or relative could force you into retirement earlier than planned. Many workers (31 percent) anticipate that they will need to provide financial support to family members. But only 19 percent of workers have a backup plan for retirement income if they become unable to work before their planned retirement date.
An unplanned early retirement may require some inventive solutions. Collinson suggests trying to stay as healthy as possible and taking on a roommate in retirement. “Maybe it’s not the retirement that we envisioned, but even though it’s different, that doesn’t necessarily mean it needs to be worse,” she says. “Creativity is key.”