Rachelle Akuffo
Thu, July 13, 2023 at 9:31 AM PDT
According to a study by the Transamerica Center for Retirement Studies, at least 55 percent of potential retirees plan to delay retirement and continue working. Yahoo Finance Columnist Kerry Hannon details the savings insecurities older U.S. workers are experiencing.
Video Transcript
RACHELLE AKUFFO: All right, well, a relaxing retirement may be a pipe dream for some with a new survey from Transamerica Center for Retirement Studies showing that 55% of people plan to continue working after they retire. Yahoo Finance's Kerry Hannon is here with the details. That's unfortunate. That's sad. I mean, is this a must?
KERRY HANNON: Well, I'll tell you, I personally don't think work is a bad thing. There's a lot of good reasons to keep working in retirement. But this is noteworthy, because it's-- across generations, people are saying, hey, we simply aren't able to save enough for retirement right now. We don't have enough income.
There's sort of this pervasive pessimism out there about outliving their savings. And so it appears to me to be a bit of a default reaction saying, well, you know what? I'm just going to keep working in retirement. Maybe not pedal to the metal, but there will be part-time work. And some are saying full-time. But shockingly, 15% did say they expected work to be their primary source of income in retirement which really surprised me.
But here's the thing, it's the first time people are actually thinking about work and starting to put it in their head that you're not going to just have a cold stop at 65 or whatever year you may be bounced out of the workplace which does happen earlier if you get a layoff and hard to get back in.
So, you know, but the number one reason people say that they plan to work in retirement, in some fashion, is because they're concerned about Social Security not being enough. The second reason is because they're worried they're not going to have enough income, enough savings in order to support their lifestyle in a comfortable way. And the third reason is to pay for health expenses, which you and I know is going to be a huge ticket item as people grow older. So those are the reasons we're seeing people thinking about it.
The problem here why we say pipe dream, why you said that, is that employers aren't quite getting that yet. They aren't set up for these phased retirements, flexible work, letting their staff kind of shift into less stressful work and, you know, adjustable hours.
They're not quite there yet. They're starting to understand that they need to offer this to retain employees, because of what? Rachelle, this is huge. The demographic shift is noteworthy. And there has been a steep drop in fertility rates. And so this, they're starting to feel the fact of a tight labor market.
And in fact, they actually need some of these older workers to continue to work because I think what we're seeing-- this transformative thing in the workplace-- is by 2030, they're going to be more people over 65 in the United States than under the age of 18. This has huge implications in the workplace. So I think employers are going to start to get this.
RACHELLE AKUFFO: I mean, I get that. My dad retired and came back to work. He loves what he does, and he's 80. And he's like, yeah, no, I'm good. I'm just going to keep working. So then for people who are thinking, you know, how do I prepare for longer working lives, what should they know?
KERRY HANNON: Right. So it's not all doom and gloom. I mean, it's really important that if you are earning some income even if you saved appropriately, I mean, it keeps you from having to dip into your retirement accounts. You can push back your Social Security benefit to age 70.
But what you need to do if you want to keep working in retirement, by all means, you've got to be prepared. You need to keep your skills up to date, you need to add certificates, and maybe even a degree if you need to. You have to be sharp. You have to be lean and mean and ready to take on work. No one's going to-- its you're not a charity case, so you have to perform. You have to stay healthy.
One of the main reasons people step out of the workplace is for health reasons. Pay attention to exercise and eating with an eye to nutrition. And do some scoping around. Start early five years before you might retire. What would you like to do?
You know, do some volunteering, some moonlighting. Try a few things out. What might be work that you can go to? So let's look at as you're not retiring from something, you're retiring to something, a new form of work that actually can be great for you financially as well as psychologically. So I hate to be such a Suzy Upsider here, but I do see the upside in it.
RACHELLE AKUFFO: No, I like that. Retiring to something. It puts a different spin on it versus, you know, it's end of an era versus actually have something to look forward to and some shifts that I can enjoy. Great stuff as always. Our very own Kerry Hannon. Thank you so much.
KERRY HANNON: Great.
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Source: Yahoo Finance
https://finance.yahoo.com/video/over-half-future-retirees-plan-163120682.html
