High-income boomers can be quite ambivalent about what they want to do once they retire, experts note. And boomer clients, who have been in the wealth-accumulation phase for most of their lives, may not always find it easy to switch to the retirement planning mode.
“As people begin to formulate more of a retirement planning mentality and see the financial implications of health care costs, of longevity, and so on, a lot find they are not in as strong a position as they had thought,” says Mark Halverson, executive director of global wealth management services for Accenture Inc., Chicago. “It’s an emotional switch from the wealth-accumulation phase.”
The uncertainty many boomers have about retirement is reflected in results of a new survey by Gray Hair Management LLC, an executive career-counseling and job search firm in Chicago. GHM surveyed almost 1,000 senior-level corporate executives aged 40 or older. Income for participants generally ranged from $150,000 to $250,000 a year.
Around 75% of executives surveyed said they planned to retire after age 60, yet only about 50% think they are financially on track to retire when they plan to.
The career counseling firm also found that:
o 28% of execs surveyed plan to retire between ages 61 and 65.
o 31% plan to retire between 66 and 70.
o 16% plan to retire after age 70.
o Only 12% plan to retire before age 60.
o 12.3% said they were undecided about when they plan to retire.
In a “perfect world,” 16% said they would retire now. Although 10.5% said they would rather never retire, 68% preferred to retire within the next 5 to 15 years.
Just 24% plan to retire at a younger age than their parents did, while 39% plan to retire at an older age, and 24% plan to retire at the same age as their parents. The remainder have parents who never retired.
The survey also found that 53% of executives believe they are on course financially to retire when they planned to. However, 34% believe they are not on course, and 12.4% admit they don’t know whether they are on course.
“There’s a lot of emotional content to retirement,” notes Kane.
Kane’s firm sees many senior-level executives who have either retired or expect to do so soon and realize they need to find another source of income.