By Pension and Benefits Editorial Staff
In answer to the question “What does `retirement’ mean to you?,” workers most associate retirement with the words “freedom” (55%), “enjoyment” (53%), and “stress-free” (43%), according to a survey conducted by the Transamerica Center for Retirement Studies® (TCRS).
“Retirement is no longer associated with a gold watch and metaphoric sunsets. Today’s workers expect to extend their working lives beyond age 65. Their vision of retirement balances continued work with freedom and more time to pursue personal interests,” said Catherine Collinson, CEO and president of Transamerica Institute® and TCRS. The survey entitled, “What is “Retirement”? Three Generations Prepare for Older Age,” finds:
- Eighty-six percent of workers cite positive word associations with “retirement, ”compared with only 37% who cite negative words.
- Fifty-five percent of workers plan to work after they retire, including 41% who plan to work part time and 14% full time. Among workers planning to work in retirement and/or past age 65, most plan to do so for financial reasons (80%) and almost as many for healthy-aging reasons (72%).
- Forty-four percent of workers envision a phased transition into retirement during which they will reduce work hours with more leisure time to enjoy life (27%), or work in a different capacity that is less demanding and/or brings greater personal satisfaction (17%). Another 22% plan to continue working as long as possible until they cannot work anymore.
- The most often cited retirement dreams are traveling (67%%), spending more time with family and friends (57%), and pursuing hobbies (48%). Thirty percent of workers dream of doing some form of paid work such as pursuing an encore career (13%), starting a business (13%), and/or continuing to work in the same field (11%). Twenty-six percent dream of doing volunteer work.
Financial challenges. Three in four workers are saving for retirement (75%) through employer-sponsored plans, such as a 401(k) or similar plan, and/or outside the workplace, according to the survey. However, the survey also outlines the financial challenges faced by workers:
- Many are not saving enough for retirement. Workers have saved $50,000 (estimated median) in all household retirement accounts. Baby Boomers have saved $152,000, Generation X has saved $66,000 and Millennials have saved $23,000 (estimated medians). Eleven percent of workers do not have any household retirement savings.
- Twenty-nine percent of workers have dipped into retirement accounts. They have taken a loan, early withdrawal, and/or hardship withdrawal from a 401(k) or similar plan or IRA. Baby Boomers (22%) are less likely to have done so compared with Generation X (32%) and Millennials (30%).
- Household debt is pervasive across generations. The majority (83%) of workers carry some form of debt. The most commonly cited forms include credit card debt (47%), mortgage (43%) and car loan (38%). Millennial workers are more likely to have student loans (25%), compared with Generation X (13%) and Baby Boomers (7%).
- Emergency savings are alarmingly low. Workers have saved only $5,000 (median) for emergencies and unexpected major financial setbacks. Baby Boomers have saved $10,000, Generation X has saved $5,000, and Millennials have saved $2,000 (medians).
- Workers are concerned about Social Security. Seventy-seven percent agree with the statement, “I am concerned that when I am ready to retire, Social Security will not be there for me,” including Generation X (84%), Millennials (80%), and Baby Boomers (65%).
SOURCE: Transamerica Center for Retirement Studies, press release.
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