Retirement Readiness

If you figure you’ll work part-time in retirement, you are not alone. Aegon’s third Retirement Readiness survey finds only 32% of employees expect to stop work completely at retirement age. Also, despite the improving economy, the survey found that pre-retirees are not confident they will lead a comfortable lifestyle. More than one-third (34%) of employees are pessimistic about having enough money to live on in retirement, and just 19% are very or extremely confident that they will be able to retire with a lifestyle they consider comfortable.

These results echo another recent survey by OneAmerica where 38% of respondents said they felt confident or very confident about maintaining their current lifestyles into retirement. In the OneAmerica survey, confidence about retirement preparation was greater with men (43%) than women (32%). Being knowledgeable about how much retirement income is needed for retirement seemed to boost individuals’ confidence. However, only 55% had calculated their retirement needs and just 35% worked with a financial adviser.

The Aegon study’s conclusion that the notion of retirement as a single fixed date has changed, and that employers and governments must start treating retirement as a series of stages may be the confidence boost pre-retirees need. Perhaps considering transitioning into retirement would be far less stressful than confronting an absolute retirement. Planning to gradually leave the workforce would also have economic benefits – longer to save in a 401(k) and the ability to delay collecting Social Security benefits.

A transitional approach also makes sense as longevity increases and retirees could spend longer in “retirement” than they did working. Whether they get paid for part-time work or pursue volunteer endeavors, retirees who abandon the black and white distinction between work and leisure may be able to enjoy a more comfortable retirement.

 

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