While nearly half (48%) of America’s workers plan to work past the age of 67, younger generations are more often planning to retire at age 67 than their older counterparts. A full 58% of workers age 30-39 believe they will be retired at 67, compared with 45% of those aged 60 and above.
Survey data released alongside the launch of the Sun Life Financial Unretirement Index (see Sun Life Tracks ‘Unretirement’ ) found that only 46% of those surveyed are “very confident’ that they will have enough money to take care of basic living expenses at the traditional retirement age of 67. Only about a quarter (28%) are “very confident’ that they will be able to take care of medical expenses and nearly as many (26%) are “not at all confident’ that they will be able to do so. And – despite believing federal drug benefits will not exist in coming years, only 59% of those surveyed cited healthcare costs as a reason they plan to continue working.
“Sun Life’s Unretirement Index shows that retirement at an early age may soon be a thing of the past,’ said Laurence Kotlikoff, Professor of Economics at Boston University. “According to the Index, half of today’s workers plan to work beyond age 67 – a dramatic reversal of the postwar trend toward early retirement. These plans to delay retirement reflect a desire to stay mentally engaged, but also real anxiety about financing retirement. Workers are very worried about their ability to rely on two historic mainstays of retirement – Social Security benefits and employer-provided benefits. Indeed, fewer than half of workers express strong confidence in being able to cover the basics in retirement, let alone live it up in retirement.’
Four out of the five reasons cited for continuing to work past age 67 are not financial, according to the report. The number one reason (83%) people don’t plan to retire at age 67 is to stay mentally engaged, and – though among those with total net assets of less than $100,000, 81% percent said they will continue to work to earn enough money to live well, virtually the same percentage that want to keep working to stay mentally engaged.
Among those with total net assets of between $100,000 and $500,000, 72% said they will continue to work because they love their careers and 66% said they were not ready to end their careers.
The survey also indicated that Americans have less confidence in factors influencing their retirement over which they have less control, and have lower confidence in the economy than any other factor measured by the Unretirement Index. The younger generations have little confidence that government benefit programs like Social Security and Medicare will be available when they retire (63% of the 30-39 segment surveyed don’t believe that Social Security will be available and also cite employer healthcare benefits as a reason to work past age 67).
Additionally, American workers are much more likely to cut back on spending and reduce debt to improve their retirement prospects – rather than seek to increase their income or change their investment mix, according to the survey. For example, the vast majority (82%) say they would reduce spending, while only 58% would alter their investments.
The study was conducted between August 9 and 19 of 2008. Telephone interviews were conducted by Interviewing Service of America using a random-digit dial (RDD) sampling method. Quotas and weights were applied to gather a sample of 1,515 people working either full- or part-time, which was representative of the U.S. working population between the ages of 30 and 66. The sample was also representative in terms of gender and four-region census break.
For more information and detailed findings of the Sun Life Unretirement Index visit http://www.unretirementindex.com