Many regaining optimism about retirement, but doubts persist
Despite gains, “Will I have enough?” remains a nagging question
When it comes to retirement, some folks are eagerly anticipating the long-awaited respite from decades of hard work, routine hours, and stress. Others are looking forward to exploring interests, pursuing hobbies, traveling extensively, and connecting with family and friends. But no matter how they spend it, much of the enthusiasm around retirement is tempered by a growing belief that additional assets will be needed to enjoy it fully.
Human resources consultant Aon Hewitt estimates retirees at age 65 will need 11 times their final salary if they want to maintain the same standard of living.1 A Bankrate.com report published last August identifies a potential savings shortfall, with only 18% of working Americans saving more for retirement than in 2012, 17% saving less, and 54% about the same.
Majority of seniors and Boomers feel good about retirement.
On the upside, most seniors are surprisingly optimistic about the future, according to a recent survey of adults age 60 and older conducted by the National Council on Aging, UnitedHealthcare, and USA Today.2 A reported 66% believe they can manage their monthly expenses, while many expressed excitement about living a longer life. Among the most anticipated events are watching their grandchildren grow and spending time with family and friends.
SIDEBAR 1: Key highlights from National Council on Aging survey:
- 86% foresee a better quality of life in next five to ten years
- 60% anticipate remaining healthy
- 71% believe their community was responsive to their needs
- 84% use technology to stay connected.
- African Americans and women are most optimistic about aging.
Baby boomers plan to retire sooner.
With several signs of economic improvement on the horizon, baby boomers are feeling increasingly positive about their retirement timeline. A 2013 Del Webb Boomer Survey3 conducted this summer revealed that a majority of employed baby boomers, aged 50-60, expect to retire earlier than planned just three years ago. Specifically, 57% intend to retire from their full-time professions at 65 vs a median age of 67 in 2010. This is in part due to their comfort with a rebounding real estate market and overall financial situation.
But it isn’t all roses.
There are, however, substantial seeds of doubt. Over half of those surveyed are worried their life savings will not sufficiently support their retirement years, a legitimate concern, since 41% of older Americans will rely on Social Security as their primary source of income during retirement. Additionally, 49% say their city or town was not doing enough to prepare for the incoming wave of baby boomers approaching retirement while 15% reported feeling isolated.
To work or not to work. That is the question.
Work is one way many plan to meet the expected retirement income shortfall. According to the survey, nearly 80% plan to work in some capacity during retirement, with 28% working on a part time or flexible basis. Some 51% plan to work full time in their current career or at a new job while 21% plan to give up working entirely.
SIDEBAR 2: Key highlights from 2013 Del Webb survey:
- 41% are likely or very likely to move
- 18% plan to do something different than their current career
- 62% will focus on activities and hobbies to enhance physical and mental well-being
- 34% want to travel
- 51% anticipate spending more time with family
- 30% believe their job will be a primary focus at age 65
SIDEBAR 3: Key highlights from Bankrate survey:
- Working Americans between 50 and 64 are saving less this year vs. last year
- 20% of people with no college degree are saving less for retirement compared to 10% of people with a college degree
- 21% of upper middle income households are saving less for retirement than last year
- 18% under 65 say they’re saving less in retirement accounts as are 7% of those 65 and older
- 21% of men say they feel better about their savings compared with 14% of women
It’s never too late to seek financial guidance.
1Huffington Post, “Study Reveals Most Americans Aren’t Saving Nearly Enough For Their Retirement,” Shelley Emling, 8/19/13
2LifeHealthPro, Seniors optimistic about future. Michael K. Stanley, July 30, 2013
3“Del Webb Survey Shows Boomers Looking To Retire Sooner,” PR Newswire, June 11, 2013