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They’ve already worked for decades. Ugh … What’s a few more years?
Many Americans expect to delay retirement by four years due to increasing living and healthcare costs, as well as under-saving and tapping into retirement funds early, according to research from Economist Enterprise. While plenty of those people will have to remain in the workforce for a couple of victory laps, advisors say some clients are driven solely by the dread of outliving their funds. A renewed retirement discussion may be a way to help calm clients’ fears about expenses in their golden years.
“People often fear running out of money more than death itself,” said Gregory Guenther, managing director at GRANTvest Financial. “Even people who have saved well can feel uneasy once the steady paycheck is about to stop.”
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Americans are playing the long game, but they might not have the best strategy. More than 60% of survey respondents said they prioritize job security over better benefits and higher pay, which in turn can limit mobility and skill development.
The whole idea of retirement has changed, too, Guenther told Retirement Upside. “For many, it’s no longer about completely stopping work at a certain age,” he said. “It’s more about having the flexibility to work less, work differently or spend more time doing things that feel meaningful.” He added that many of his clients have transitioned into consulting, mentoring, volunteering or part-time work because they enjoy the sense of purpose.
The Economist Enterprise report also found:
More than a third of workers have taken loans from a retirement account or hardship withdrawals from their 401(k)s because of financial pressures.
Gen Z workers have the most dour outlook on retirement, expecting to work on average five years longer than they would like to. As income lowers, that timeline increases to six years.
Only a fifth of respondents say they plan to delay retirement because they enjoy their work.
In for the Long Haul. While 67 is the full retirement age recognized by the Social Security Administration, the median age when people exit the workforce is 62. Often, it’s less a choice and more a product of burnout, health issues or layoffs. Those who stick around, however, often do so to soothe their egos, said Flavio Landivar, an advisor with Evensky & Katz Wealth Management. “Simply stepping away is something they are not ready for,” he told Retirement Upside. “The key is really making sure you think of what’s next, and what are you retiring or repurposing to.”
This post first appeared on Retirement Upside. To receive actionable insights for financial advisors guiding clients through the strategies, products, and policy shifts shaping retirement outcomes, subscribe to our free Retirement Upside newsletter.
