Hold the gold watch. Cancel that tee-time. A majority of American workers are planning to work past age 65, according to the 13th Annual Transamerica Retirement Survey. The recently released survey of more than 3,600 American workers finds a lack of retirement readiness that is forcing them to adjust to the new realities of an economy still struggling to recover from the recession.
Fifty-six percent of respondents said they plan to work past the traditional retirement age of 65, while 54 percent plan to continue working after they retire.
American workers are increasingly lacking in retirement readiness, which the Transamerica Center for Retirement Studies defines as “a state in which an individual is well-prepared for retirement, should it happen as planned or unexpectedly, and can continue generating adequate income to cover living expenses thoughout his/her lifetime through retirement savings and investments, employer pension benefits, government benefits and/or continuing to work in some manner while allowing for leisure to enjoy life.”
Achieving retirement readiness has become more challenging due to increased life expectancy, concerns about the financial stability of Social Security, and the shift from tradition pension plans to self-funded 401(k) retirement plans.
While American workers are committed to saving for retirement (77 percent of respondents said they are participating in their company’s employee-funded retirement savings plan and 24 percent said they increased their 401(k) contributions in the past year), only 39 percent of American workers surveyed said they are building a large enough nest egg, while 69 percent agreed that they could work until age 65 and not save enough to meet their retirement needs.
No wonder that 64 percent said they are less confident in their ability to achieve a financially secure retirement. Nearly half of American workers in their fifties (47 percent) said they expect to work longer and retire later than planned. Forty-three percent of workers in their thirties and forties feel similarly.
And yet, while 70 percent said they do not know as much as they should about retirement investing, 84 percent said they prefer a self-directed approach regarding retirement saving and investment. Of these, 49 percent seek some advice but make their own final decisions and 35 percent do their own research and make their own decisions.
The knowledge to make informed decisions about retirement is one of five keys to retirement readiness, the Transamerica Center for Retirement Studies recommends. The others include: having a clear vision of retirement; a retirement strategy that incorporates needs, risks, and a Plan B; retirement income; and an open family dialogue about finances and expectations.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.