Pre-Retirees Choosing to Work Longer

However, retirees report higher levels of happiness

Pre-retirees are more likely than retirees to use words like "bleak" or "dismal" to describe retirement. Pre-retirees are more likely than retirees to use words like "bleak" or "dismal" to describe retirement.

Pre-retirees surveyed by Northwestern Mutual put their expected retirement date almost 10 years later than retired respondents ultimately stopped working, the company announced Tuesday. On average, retirees left the work force at 59, while people who are still working expect to do so until 68.

In the latest release of findings from the 2014 Planning and Progress Study, Northwestern Mutual found that not only are pre-retirees planning on retiring later, almost half say they’ll keep working in retirement too — not because they have to, but because they want to.

By comparison, 72% of retirees said they were completely retired.

“Retirement is being redefined from one generation to the next,” Greg Oberland, Northwestern Mutual president, said in a statement. “For those who have the flexibility and security to choose, many are deciding to continue working, possibly in second careers that are personally meaningful to them. The key is having that flexibility and security — and that’s what we aim to help people achieve.”

The survey found substantial numbers of people don’t have that security. More than 20% of workers said they weren’t sure how long they’ll spend in retirement. Among workers over 60, 38% said they would probably have to work at least until age 75.

Workers are also more likely to view retirement negatively than retirees, the survey found. People who were still working were more likely to use words like bleak, dismal or nonexistent to describe their expected retirement. Just 37% of pre-retirees expect they’ll be happier after they stop working.

On the other hand, retirees used words like fun, cheerful or pleasant to describe retirement, and 60% said they’re happier now than when they were working. Most retired respondents — 84% — said they were happy overall in retirement.

“The message retirees seem to be sending is to fixate less on numbers and more on quality of life,” Oberland said. “Retirement has less to do with account balances and more to do with who you are and what you want.”

That’s no excuse to ignore the numbers, though. The survey found while retirees were relatively satisfied with retirement overall, those who were better planners were more likely to say they were happy: 91%, compared with 63% of non-planners.

For example, half of retirees experienced significant increases in health care costs. Of those, 45% were taken by surprise.

“Visualize that period of your life and develop a plan to get there,” Oberland said. “It’s always possible that it may not be exactly what you imagined, but if you have a plan, there’s a good chance it will be one of the happiest and most fulfilling periods of your life.”

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Check out Many Want to Slow Down, Not Stop, in Retirement on ThinkAdvisor.

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