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Retirement Planning > Retirement Investing

Two-Thirds of Pre-Retirees Expect to Work Past 65

By Michael S. Fischer

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What You Need to Know

  • Survey participants said their retirement plans had changed over the past 12 months.
  • Almost 7 in 10 said they anticipate more challenges in retirement than their parents and grandparents faced.
  • Advisors have increased efforts to incorporate strategies to protect pre-retiree clients against market risk.

American pre-retirees today don’t expect to leave the workforce when they turn 65, according to Nationwide’s newly released Advisor Authority survey.

Sixty-nine percent of respondents 55 to 65 years old agreed that the retire-at-65 norm does not apply to them, and 67% said they anticipate more challenges in retirement than their parents and grandparents faced.

Four in 10 pre-retirees said they would continue working in retirement out of necessity to supplement their income, and 27% plan to live frugally in order to be able to fund their retirement goals. 

Survey participants said their retirement plans had changed over the past 12 months, with 22% expecting to stop working later than planned. 

“Many of us watched our parents and grandparents enjoy a smooth transition to a secure retirement powered by traditional pension benefits,” Eric Henderson, president of Nationwide Annuity, said in a statement. “Today’s investors are having a tougher time picturing that for themselves as they grapple with inflation and concerns about running out of money in retirement.”

The Harris Poll conducted the survey Jan. 8-23 among 518 advisors and financial professionals and 2,346 adult investors with investable assets of at least $10,000. The investor sample included a subset of 391 “pre-retirees” aged 55 to 65 who are not retired, and subsets of 346 single women and 726 married women.

Battling Higher Costs

The survey found that 42% of participants are finding it harder to manage day-to-day expenses because of the cost of living. Twenty-seven percent said that inflation is forcing them to save less for retirement, and 57% believe that inflation is the most immediate challenge to their retirement portfolio over the next 12 months.  

In addition, 4 in 10 pre-retiree investors are avoiding unnecessary expenses — vacations, jewelry, shopping sprees and the like — to save more for retirement, compared with a third of non-retired investors. 

On top of all this, previous generations’ trust in traditional financial and retirement safeguards has waned. Lack of confidence in the viability of Social Security upon retirement, cited by 38% of respondents, is a significant factor influencing pre-retirees to rethink or redefine their retirement planning strategies, Nationwide said. 

Forty-three percent of pre-retirees said they were not counting on Social Security benefits as much as they had previously, and 27% expect to receive less in benefits than they had anticipated.

Advisors’ Guidance

Nationwide’s survey results showed that advisors are offering actionable insights and recommendations to guide clients toward post-career financial security. These are the main topics that pre-retiree investors are discussing with their advisors: 

  • Accumulating sufficient savings to enter or stay in retirement: 49%
  • Tax planning strategies: 38%
  • Converting accumulated savings into retirement income: 33% 

Twenty-eight percent of advisors reported that they counseled pre-retiree clients on when to claim Social Security benefits, 23% on taxes and tax planning and 21% on planning for health care costs in retirement. 

In addition, 32% of advisors said they are recommending that pre-retiree clients delay taking Social Security benefits to ensure maximum payment benefits in retirement, an increase from 28% five months ago.

Advisors have also increased their efforts to incorporate strategies to protect pre-retiree clients against market risk. Sixty-one percent are adopting strategies or annuities to do so, compared with 55% just five months ago. 

A majority of advisors surveyed said they use annuities and diversification/non-correlated assets as their main solutions to help clients protect their assets against market risks.

“The final years leading up to retirement are a critical time for making decisions that can carry life-long implications,” Henderson said. “Good advisors can identify gaps and create plans to address them before it’s too late.”

Michael S. Fischer

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