Work is the new retirement.
Nearly 7 in 10 U.S. investors who aren’t retired say they plan to stay in the workforce longer, according to a new survey. Nearly half do so to achieve their goals.
The survey results are study The study, by Nationwide Financial, released Jan. 25, is surprising because it covers middle-income to very wealthy savers aged 18 and over with liquid assets between $100,000 and more than $5 million. am.
Nationwide did not say how many of the 521 are “non-retired.” This is an important detail that reveals which age groups are most actively rethinking retirement and provides financial her advisors with clues for client management. Nor does it reveal what percentage of each non-retired demographic plans to work longer.
“Working longer” was also not quantified in this study.
Still, with inflation rising and markets weighing down, it suggests that post-retirement stress isn’t just for pensioners struggling with a side job bagging groceries to make ends meet. I’m here. Worrying about having enough money till the end also seems to permeate the mentality of some “millionaires” and the ultra-rich: Nationwide said he was in July 2022 and he was 8 We conducted a survey in May. This was as volatility in stock and bond markets, along with price spikes and rumors of a recession, began to weigh on consumers’ purchasing power.
“The ideas we have about what retirement looks like are changing for many people, either out of necessity or because they want to stay active and engaged.” Rona GuymonNationwide’s senior vice president of annuities sales said: statement About research.
According to research, people are retiring late in lifeThe Center for Retirement Research at Boston College reports that the average age of men at retirement has risen from 61.9 30 years ago to 64.7 in 2021.
People are also living longer: Before the COVID-19 pandemic, a healthy 65-year-old man had a 55% chance of living to 85.According to the American Academy of Actuaries and the Actuarial Society life calculator.
Research into working in old age is not new. Bain in 2018 report We found that high-income workers were more likely to be in jobs where physical weakness would not be a “barrier” to work into their late 60s or 70s. “As a result, highly educated people tend to work longer hours,” the report said.
What’s growing is bombarding Americans with messages about their lack of “retirement readiness.” Insurer Aon said: Less than a third have “enough savings”. It means “sufficient assets to meet your retirement needs.” Fidelity Investments invests 55% of his American “Yellow” or “Red” Danger Zones This means that they will not be able to fully cover major expenses such as housing, medical care, and food in old age.
That’s a gloomy warning last month lurking under a federal law aimed at increasing retirement preparedness. The law, known as SECURE 2.0, includes: Clause More companies need to offer retirement plans, encourage employees to contribute, withdraw money from retirement plans, and add new rules about making “catch-up” donations later in life.
Nationwide’s survey comes when demographics indicate the future is old. Her 65+ population in the United States could grow by more than 50% by 2030, reaching about 74 million. white paper It was discovered by the Securities and Exchange Commission. By his next decade, that senior group will make up more than one of her five households in the United States. The federal government generally considers full retirement age to be 67 for her.
But Nationwide’s research may also reveal a disconnect between what people think they can do and what they actually can do.Percentage of educated whites who can working at 62 but not working at 70, According to the Center for Retirement Research, 17% of men and 13% of women retire due to illness or disability. Among educated blacks, the percentage is 41% for men and 28% for women.
purpose, activity, need
Disconnection aside, 69% of investors who haven’t retired yet tell Nationwide that they plan to continue working into old age for one or more reasons. Six of his 10 respondents said they did it “to stay physically and mentally active” and 41% said they did it “to keep a sense of purpose.”
However, 44% cite the need to “compensate for retirement savings and income”. (Numbers do not add up to 100, as respondents may have given multiple reasons.)
Of the 521 people surveyed by Nationwide, the definition of generation used was:
- 97 are Gen Z (ages 8-25)
- 132 are millennials (ages 26-41)
- 128 are Generation X (42-57)
- 145 are baby boomers (58-76)
- Nineteen were 77 years or older (“adults”).
The insurer’s survey results show that more than seven in 10 workers are at least somewhat confident and almost three in 10 are very in contrast to those found to be confident in
Investors with advisors feel stressed
Nationwide also surveyed 506 financial advisors. Just over half, or 52%, were commission-charging independent advisors, and 64% were telcos or independent broker/dealers. Another 10% were banks, insurance companies and other financial institutions. He said more than three in four of his advisors around the world, or 78%, believe their clients are likely or will continue to work after retirement.
The survey also found that 49% of non-retired investors working with advisors reported being “extremely nervous” about using up their retirement savings in today’s volatile market. understood. In contrast, only his 32% of investors without advisors were concerned.
This could indicate that the advisor is not doing enough work to appease a nervous client, or that “ignorance is bliss” for DIY savers, or both. There is, Guymon said, “by reaffirming the importance of advisors following financial plans, we have presented an opportunity to help calm nervous clients.”
She added that adviser-less savers “may have some blind spots that financial professionals can address.”