December 14, 2017
One in seven workers (14%) plans to live to age 100 or older, according to findings of the poll, Wishful Thinking or Within Reach: Three Generations Prepare for “Retirement,” released on December 13 by the nonprofit Transamerica Center for Retirement Studies (TCRS). However, unless they come from “old money,” they don’t know how they will pay for living expenses.
The median age that respondents predicted they would reach was 90, the researchers said. With that in mind, among all workers, only 18% are very confident that they will be able to fully retire with a comfortable lifestyle.
“Today’s workers are expecting to live long lives and, in doing so, they are disrupting retirement as we once knew it. Many are envisioning retirement as a new chapter in life that involves continued work but with more free time to pursue personal interests,” said Catherine Collinson, president of TCRS. “The big question is whether their vision is wishful thinking or within their reach.”
In the extra free time, they envision traveling (70%), spending more time with family and friends (57%), and pursuing hobbies (50%).
According to the researchers, a noteworthy 30% cite some form of paid work as a retirement dream, including pursuing an encore career (13%), starting a business (13%), or continuing to work in the same field (11%). Twenty-six percent of workers dream of doing volunteer work in retirement.
The survey finds that more than half of workers (53%) expect to retire after age 65 and 56% plan to continue working at least part-time in retirement. Among them, 83% percent cite financial-related reasons for doing so, while 75% cite healthy aging-related reasons, such as “being active,” and “keeping my brain alert.”
As part of the 18th Annual Transamerica Retirement Survey, one of the largest and longest running surveys of its kind, workers across generations , 57% of Generation X and 55% of Baby Boomers cite outliving their savings and investments as one of their greatest retirement fears.
Forty-seven percent of Millennials fear that they will be unable to meet the basic financial needs of their family when they retire. Seventy-six percent of all workers are concerned that Social Security will not be there for them when they are ready
“Many workers are not saving enough to amass the financial resources required to support their vision of retirement, while others are at risk of poverty,” said Collinson. “Given increases in longevity, working as long as possible is a practical solution. However, it’s unclear whether employment opportunities will be available. According to the Bureau of Labor Statistics, only one in five Americans age 65 and older was employed in 2016.” 1
“Despite the all-too-real challenge of saving, many workers are overlooking opportunities that may help them improve their long-term financial prospects,” said Collinson. Specific missed opportunities include:
- Resisting procrastination. Forty percent of workers prefer not to think about or concern themselves with retirement investing until they get closer to their retirement date, a finding which is highest among Millennials (54%), followed by Generation X (34%) and Baby Boomers (25%).
- Calculating retirement savings needs. Forty-seven percent of workers who provided an estimate for their retirement savings needs did so by guessing, a survey finding that is consistent across the three generations of workers. Only 7% have used a retirement calculator.
- Formulating a written strategy for retirement. Sixteen percent of workers have a retirement strategy in writing. Ironically, Baby Boomers (12%) and Generation X (15%) respondents were less likely than Millennials (20%) to have a written strategy.
- Taking steps to be able to continue working past 65 or in retirement. Less than half of workers (46%) are keeping their job skills up to date, a finding that is consistent across the three generations. Only 18% are scoping out the job market and opportunities available, a finding that is higher among Millennials (22%) than Generation X and Baby Boomers (both 15%).
The researchers said that success also will be highly dependent on an employment market that embraces older workers, employers’ offering of retirement benefits along with other health and welfare benefits, adoption of phased retirement programs by employers, and the preservation of safety nets such as Social Security and Medicare.”
The analysis in Wishful Thinking or Within Reach: Three Generations Prepare for “Retirement” was prepared internally by the research team at TCRS. The 25-minute online survey was conducted within the United States. by The Harris Poll on behalf of TCRS between August 9 and October 28, among a nationally representative sample of 6,372 workers, including 2,593 Millennials (born 1979-2000), 1,586 Generation X (born 1965-1978), 2,076 Baby Boomers (born 1946-1964) and 117 workers who were born prior to 1946.
Research contact: http://www.profnetconnect.com/catherine_collinson