As Many Retirees Plan to Work for Fulfillment as for Money, Empower Finds

About as many people who plan to work in retirement want to do so for personal reasons as opposed to strictly financial ones, according to a recent report from Empower.

In a survey of more than 1,000 Americans, 41% say they are working or plan to work in retirement for personal fulfillment. Meanwhile, slightly more than 40% say they are working or will work due to financial needs, according to an Empower report,  “Redefining the ideal retirement,”  released September 21.

“There are many different reasons someone may want to continue working, and they’re not always financial,” says Nik Franklin, a financial adviser for Empower. “Every person’s ideal retirement will look different. Whether someone works post-retirement may affect their retirement income and investment strategies and when they take Social Security.”

Overall, more than half (58%) of respondents said they are likely to work in retirement, with Baby Boomers (born from 1946 through 1964) and Generation X (born from 1965 through 1980) coming in at a higher 64%.

Ready or Not

It has been well documented that many Americans are not ready for retirement. In a Schroders 2023 U.S. Retirement Survey published earlier this year, most working Americans showed concern that a workplace retirement plan will not grow to the level they hoped to achieve, as expressed by 64% of Millennials and 62% of workers 45 and older.

But the Empower study showed that a decent number of people are working or plan to work for personal reasons. Nearly two out of five Americans said working post-retirement would help them maintain a daily routine (37%) and keep their minds (37%) and bodies (36%) active. Gen Zers are the least likely generation to say they are open to working after they retire, at 49%.

Some do remain concerned about economic factors that could impact their finances in retirement. Respondents expressed concern about inflation (52%), running out of money (51%) and unexpected expenses (49%).

Adviser Franklin says personalized financial planning is key, no matter what the path.

“Holistic financial planning is about creating a unique roadmap: customized solutions that consider an individual’s circumstances, goals, major life events and the future they imagine for themselves and their family,” he says. “Receiving objective advice can help people map out a strategy for the long term.”

401(k) Key Investment

Overall, respondents point to having a 401(k) account as their top vehicle for retirement saving (56%), followed by stocks (35%) and then a traditional savings account (34%).  

Empower’s data shows that people aged 60 through 65 have, on average, $198,194 in their 401(k) account.

According to Alight, another recordkeeper, the average plan balance overall fell from $114,280 at the start of 2021 to $111,210 at the end of 2022, showing grimmer news for retirement savers.

“Whether no work, full-time work or part-time work, the key is to make sure each employee receives the necessary advice and comprehensive financial assessment to pave the way for a customized plan,” Franklin says. “Helping participants understand their complete financial picture—expected expenses, income streams and overall net worth—is a great way to help them navigate these decisions.”

The research included a survey of 1,009 Americans conducted in July 2023 by Fractl on behalf of Empower.