Majority of baby boomers and Generation X-ers will rely on work as a source of retirement income
The economic collapse has been a retirement planning game changer. The traditional conception of retirement has been living a life of leisure after a full working career, but a majority of baby boomers (64 percent) and Generation Xers (70 percent) now say that work in retirement will be a source of retirement income, according to Insured Retirement Institute research.
This is part of a long-term trend, the IRI states. The Employee Benefit research Institute (EBRI) has found that seniors ages 65 and over, the traditional retiree group, comprise an increasing share of the labor force, from 10.7 percent in 1986 to 17.9 percent last year.
There are elevated concerns about retirement in the households of Main Street investors with a net worth between $100,000 and $1 million (not including primary residence), according to a first quarter wealth level study conducted by Millionaire Corner. Fifty-seven percent said they fully expect to have sufficient income to live comfortably during retirement, more than 20 percentage points less than in Millionaire and High Net Worth households.
Twenty-seven percent said that they will be delaying their retirement because of current economic conditions with those ages 45-54 most likely to express this attitude (41 percent). They are also more likely than respondents overall to say they are not saving enough to meet their financial retirement goals (39 percent vs. 29 percent).
The IRI study finds that 29.5 percent of baby boomers and 31 percent of Gen X-ers will be relying on work in retirement as a major source of income.
Other key findings of their study:
· While 34 percent of baby boomers and 25 percent of Gen X-ers plan to retire at age 66 or older, a significant percentage in both generations (31 percent of boomers and 27 percent of Gen X-ers) state they do not know what age they would retire.
· Ready or not: This year, half of surveyed retirees reported that health issues or disability (51 percent), job changes or downsizing (21 percent) and family responsibilities (21 percent) forced them to retire earlier than planned.
· Among workers age 50 and older, 38 percent expressed an interest in phased retirement, a gradual transition into retirement instead of an abrupt stop to working. More than three-quarters (78 percent) said that this flexible work arrangement (part-time employment, working fewer days per week or hours each day) would encourage them to work past their expected retirement age.
Work should be a component of retirement income but should not be relied upon, the IRI report concludes. “The importance of working with a financial advisor early in your career to develop a retirement savings plan cannot be overestimated.”
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.