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April 03, 2014 at 06:24 AM
The baby boomers’ march into retirement is a major demographic trend that naturally attracts research. The following studies of pre retirees’ and retirees’ attitudes and behaviors provide interesting insights that can benefit your retirement advisory work with clients.
Redefining retirement
You’ve probably noticed more of your clients expressing a wish to continue working in some capacity past the “normal” retirement age. Their motivations will vary, but their desire to keep working is part of a growing trend.
In August and September 2013 the Associated Press-NORC Center for Public Affairs Research surveyed more than 1,000 U.S. adults ages 50 and over. The survey confirmed an ongoing shift in Americans’ ideas about retirement and found that workers are retiring later and are often not retiring completely.
The line between working and retirement is shifting for Americans ages 50 and older, with many currently or expecting to continue working for pay during retirement. Among those who are working and not yet retired, 47 percent said it was very likely that they will do some work for pay during their retirement and another 35 percent said it is somewhat likely. Respondents gave both financial and nonfinancial reasons for their plans.
Matt Sedensky, a Fellow at the Associate Press-NORC Center for Public Affairs Research in Chicago and one of the study’s co-authors, notes that it’s been known for some time that the retirement age was moving higher. The study helped put a number on that trend, however.
“I think it was very interesting to be able to quantify that we’re seeing the line between work and retirement blurring,” he said. “More than 80 percent of the workers in our study said they’re at least somewhat likely to work for pay even after so-called retirement. So, we’re seeing people trickle down their hours, leave the workforce and re-enter the workforce, you know, take on a whole new career. We’re seeing all different variations of it, but what’s coming across pretty clearly is that this word ‘retirement’ is being redefined.”
The average retirement age has shifted since the beginning of the Great Recession in December 2007. Among those who reported retiring before the Great Recession, the retirement average age was 57. That age increased to 62 after the recession. The authors concluded this trend is likely due to a combination of diminished retirement savings during the bear market and lengthening life spans. But a look back at history shows that working later in life is not a new phenomena, Sedensky said. In the early part of the 20th century, the average retirement age of men was about 73, so it’s not unheard of to have people working to 67 or 68.
Although your older clients might be interested in and willing to keep working, the study found that they face age-related challenges, both on the job and in landing a new position. The unemployment stats support this finding. While the overall unemployment rate is relatively lower among older age groups, long-term unemployment is much higher. For workers who lose their job after age 50 and try to find employment with comparable income, “it’s just insurmountable for many of them,” he says.
Overall, 20 percent of people 50 or older say they have personally experienced prejudice or discrimination because of their age in the job market or at work since turning 50, including being passed over for a raise, promotion or chance to get ahead; receiving certain unwanted assignments; or being denied access to training or the opportunity to acquire new skills because of their age.
