According to a recent survey of American workers conducted in February and March 2011, 39% of workers plan to work past age 70 or not to retire at all.
Last week the Transamerica Center for Retirement Studies released the results of its annual Retirement survey. The survey, conducted by the Transamerica Center every year since 1999, included a representative sample of 4,080 people working full or part-time for a for-profit business employing 10 or more people.
The results also reflect workers’ perceptions that it will be harder to retire in the future than they thought it would be a few years ago.
More People Plan to Work LongerIn the 2009 and 2010 surveys, 28% of respondents indicated that in the last 12 months, their expected retirement age had increased. This year, the number went up to 40%. Four out of ten workers also indicated that they expected to work past retirement age because they would need the income, benefits, or both.
Many Haven’t Saved Enough for RetirementWhen asked to estimate the amount of savings they would need to retire, 41% estimated figures in excess of $1MM, and the median figure was $600,000. Among workers age 60-69, 30% have saved $250,000 or more. But many workers appear to be far from their goals: roughly 46% of respondents 50 and older have less than $250K saved for retirement. Even among workers 70 and older, 43% had less than that amount saved.
Among workers in most age categories (Echo Boomers, Gen X, and Baby Boomers), about 70% said they believe that they could work until age 65 and still not have enough for retirement. 56% of mature workers (those over 65) said the same thing, indicating that they already know that they do not have enough to retire. Even among higher-paid workers – those making $100,000/year or more – 59% believe that they may not have enough to retire at age 65.
Many Currently Working Have No “Plan B”Surprisingly, 71% of the workers who plan to work past age 70 have no backup plan for the possibility that they may find themselves unable to work as long as they had expected. In the event of a layoff, health problems, or other unforeseen changes, these workers could be in serious financial trouble.
51% of the workers surveyed were “strongly” or “somewhat” confident that they will be able to have a comfortable retirement. But quite a few people appear to be ill-prepared for retirement, and the future of Social Security benefits is looking none too encouraging.
There seem to be few options for those who will eventually find themselves unable to keep working as long as they’d like to. Although working as long as possible is a good strategy for many people, it’s unwise to depend on a plan that requires working well past age 70. For many the solution may lie in finding ways to reduce spending now so that future spending is more manageable.