“In the annuity space, traditionally, products have offered guaranteed lifetime steams of income. That might be fine for people who are going to work all their life, retire, and get a pension or Social Security and supplement it with their savings,” says Michele Van Leer, senior vice president and general manager of Sun Life Financial’s Retail Insurance and Annuity Division. “What our survey shows is that not everyone is going to do that–people are going to retire and their income needs are going to vary. Maybe they’re going to start that second job. Maybe they’re going to start a business, travel, or purchase a second home.”
Van Leer is referring to a new index recently released by Sun Life Financial. The Unretirement Index, which tracks the changing attitudes and expectations American workers have regarding retirement, reveals some surprising results as the median age of Americans rise and more Baby Boomers are deciding when to take Social Security and when to exit the workplace. Sun Life defines “unretirement” as working at least 20 hours per week after the age when one is eligible to receive full Social Security benefits.
According to the Index, in which 1,515 people working either full- or part-time, and representative of the U.S. working population between the ages of 30 and 66, with assets from less than $100,000 to greater than $500,000 (not including the net worth of the person’s place of residence) were interviewed, almost half (48%) believe they will still be working at the traditional retirement age of 67, and four of the five top reasons given had nothing to do with income. Instead, the most cited reason for continuing to work (83%) was “to stay mentally engaged”–a finding consistent across all income levels, gender, and age demographics. The study was conducted in August 2008 when there was plenty of financial uncertainty in the markets, though that uncertainty has increased since then with the spate of nationalizations, bankruptcies, shotgun marriages, and bailout legislation to address the global financial crisis.
“We were surprised that four out of the five reasons that people plan to continue to work beyond age 67 weren’t financial in nature,” notes Van Leer. “It used to be all about fear in not saving enough, but people working into their 70s want to stay mentally engaged, love their jobs, want to further their careers, and want to be close to people. Those four reasons were very compelling and seem to withstand all kinds of economic cycles,” she adds. In fact, a significant portion of those with the means to retire are part of the group deciding to stay in the workforce. Nearly 40% of workers surveyed with household assets of more than $500,000 still plan to work at least part-time.