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Gen X Says: What Retirement?

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Gen Xers are seemingly in no hurry to leave the work force.

According to a new study from Ameriprise Financial, 73% of Gen Xers plan to work after they retire — although their reasons for doing so have less to do with money and more to do with finding fulfillment.

“The new reality is that Gen Xers are planning to reinvent retirement,” says Marcy Keckler, vice president of Financial Advice Strategy at Ameriprise, in a statement. “They don’t have an on-off switch in terms of leaving the work force and instead anticipate a gradual evolution into this new phase of life, which really sets this generation apart.”

Ameriprise Financial released the results of its Retirement 2.0 study on Wednesday morning.

The study, which surveyed more than 1,500 Americans ages 35 to 50 with at least $100,000 in investable assets, takes a look at how Generation X is approaching retirement.

The survey found that the vast majority (90%) of Gen Xers who plan to work after they retire see themselves working in a different capacity, with more than half preferring part-time work only.

Meanwhile, 27% would prefer to transition consulting work after retirement, and 9% would like to work in a seasonal position.

Other Gen Xers would prefer to work in their own business (20%) or a home-based business (16%).

Interestingly, the driving force behind Gen Xers remaining in the work force isn’t finances. According to the survey, mental and social interaction will be the driving forces behind their decision to stay in the workplace post-retirement.

What’s important for Gen Xers who plan to work in retirement is finding occupations that are less stressful (50%), more rewarding (33%), socially meaningful (24%) and more interesting (18%).

Despite Gen Xers’ plans to stay in the work force, they are still saving for retirement.  

Encouragingly, the study found that Gen Xers began planning for retirement early and started saving at the average age of 26.

The majority of Gen Xers (76%) report proactively planning for their retirement, according to the study. Eight in 10 (79%) respondents are currently saving through a 401(k) plan, and seven in 10 (69%) are investing in an IRA or similar account.

These high percentages may have something to do with the fact that Gen Xers think they will rely on their 401(k) accounts (42%) or IRAs (29%) as their main sources of income during retirement. Meanwhile, the study finds that pensions (14%) and Social Security (5%) are expected to take a back seat as primary sources of retirement funding.

“Having grown up in a different era than their parents and seeing how the landscape has changed, Gen Xers aren’t counting on pensions or Social Security to fund their retirement,” says Keckler, in a statement. “Instead, they’re taking matters into their own hands. They are setting aside money and investing now, while time is still on their side and they’re entering their peak earning years.”

According to the study, Gen Xers are confident they’ll meet their financial goals for retirement.

A majority of Gen Xers (77%) report that they are saving enough to afford the lifestyle they want in retirement, and 64% are making investments to generate extra income in retirement. According to the study, only 22% of Gen Xers “haven’t really planned for their retirement” and a small 1% “have not even thought about it.”

Despite their confidence, some retirement worries remain. The majority of Gen Xers (75%) are concerned about the rising cost of health care, and 63% fear they could be burdened by the cost of long-term care. They also have concerns about not being able to rely on funds from Social Security or Medicare.

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