(Bloomberg Business) — In the past, somebody working in retirement might have been pitied. Now, they're more likely to be envied.
The rocking-chair retirement image has been smashed to bits, both by desire to keep working and by dire retirement savings realities. Many Americans want to work well beyond age 65 if their bodies and employers allow. In a 2014 Merrill Lynch Bank of America survey, boomers expected 17 percent of their retirement funding to come from employment income; that number jumped to 26 percent for millennials. But a mounting number of surveys drive home the fact that counting on income to be earned in retirement is risky.
The latest pieces of unwelcome evidence, in a survey of middle-income baby boomers by insurance firm Bankers Life, isn't entirely gloomy, but does serve as a reality check. (Middle income is defined as between $25,000 and $100,000 in annual household income; about 1,000 middle-income and 2,300 retired boomers, 51 to 69, were surveyed.) Many middle-class workers just don't get to work as long as they want to, which puts their retirement savings plans at risk. The 28 percent of retired boomers surveyed who are or have been employed in retirement often earn significantly less than in their previous job, with close to 75 percent saying their hourly compensation is "much less" than before.
On the flip side, people in professional services who can do part-time consulting work often wind up having bonus income in retirement, said financial planner Michael Kitces. His wealthy clients often get bored after six to 18 months, and so have encore careers they didn't count on.
