Doubts about relying on Social Security and fears about saving too little have resulted in a surge in the number of Americans who are planning to continue working into their retirement years.
But those expecting to remain in the workforce might want to rethink their strategy.
In a survey commissioned by PGIM Investments, around half of respondents who are under retirement age said they will likely work full- or part-time even when they are eligible to retire. However, the reality is only 6 percent of today’s retirees are currently employed.
“While changes in retirement expectations are often driven by pure economics, these study results also suggest a mind shift in how people are thinking about retirement. However, pre-retirees’ actions don’t always back up their goals,” Stuart Parker, president and CEO of PGIM Investments, said in a statement.
In a report, titled 2018 Retirement Preparedness Study: A Generational Challenge, PGIM delved further into stats by age, noting that 52 percent of Baby Boomer pre-retirees expect to continue working. More Gen Xers—58 percent—plan to remain employed in retirement than any other age group. And among Millennials, 43 percent said they’ll partially fund their retirement through work.
What’s more, the study uncovered shifting definitions of the “dream retirement.”
“Pre-retirees are more likely to base their decision about when to retire on their wealth rather than their age with half of Gen Xers and 62 percent of Millennials saying they will retire when they have saved enough money,” the report noted. “Current retirees decided when to retire largely based on their age and eligibility for Social Security and pensions.”
In addition, 39 percent of pre-retiree respondents said they want to volunteer after retiring, while others are looking to turn a profit. One in five Millennials want to open a business during their golden years. Nine percent of Gen Xers and 4 percent of Baby Boomers share this goal.
As a result, “the asset management industry will need to rethink the way that it does business and bring products and services in line with changing customer needs,” Parker said.
And how have current retirees fared in terms of “living the dream” by their standards?
Over half (51 percent) said they are indeed living their best life. The survey showed that, on average, those who are satisfied with their situation started saving six years earlier than their peers.
Those who indicated that retirement wasn’t all they imagined it would be were less likely to have pensions or diversified sources of income, and were less likely to have been able to retire at their planned retirement age.
Jessica Claeys is an editor, writer, and graphic designer, who has been creating both print and digital marketing and communications content for 10+ years.
Jessa Claeys is a licensed insurance producer in the state of Colorado and an insurance editor for Bankrate. She currently covers auto, home and life insurance with the goal of helping others secure a healthy financial future. Jessa has over a decade of experience writing, editing and leading teams of content creators. Her work has been published by several insurance, personal finance and investment-focused publications, including BiggerPockets, 401(k) Specialist, BP Wealth and more.