Working in Retirement: Intentions vs. Reality

According to a recent Retirement Confidence Survey, Americans are now shedding their false confidence about their retirement futures and accepting that their meager retirement savings won’t last very long. But the benefits of accepting that they have a retirement problem may be short-lived.

A key finding of the survey is that more workers (74%) now expect to work for income in retirement. That percentage is way up from 56 percent in 1998. If 74% of our fellow workers plan to “retire” and still work, how are we now defining retirement? I suppose that means we just aren’t going to work as hard. Or perhaps we will simply declare ourselves “retired”, draw Social Security benefits, and show up at the office as usual.

The real problems with this intention to work in retirement are two-fold. First, it means that in combination with not having saved enough, our fellow workers aren’t mentally prepared to cut back on their current lifestyle when they retire. The only solution for them is to keep earning a paycheck.

That brings us to the second – and more severe – problem: Intention – meet reality. This is from the survey commentary:

The Retirement Confidence Survey has consistently found that workers are far more likely to expect to work for pay in retirement than retirees are to have actually worked.  Only 23 percent of retirees report they worked for pay in retirement. So intentions may be one thing and reality another.

Compare those numbers: 74% of workers today “intend” to work in retirement, to compensate for their failure to save enough. However, only 23% of retirees actually do work.

Something has to give, don’t you agree? I think it will be the “working” part. So you had better put a Retirement Plan B in place, such as more saving and less spending.

Here is a link to a Forbes article about the Retirement Confidence Survey: Trouble on the High Seas of Retirement?

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