A new research report found that 70 percent of pre-retirees plan to work longer in retirement, while just 37 percent of retirees reported doing this to address retirement risks. The findings come from the Society of Actuaries report, “2013 Risks and Process of Retirement Survey.” It offers insights on how Americans decide to retire and how they manage resources in retirement.
The report was derived from the results of an online survey of retirees and pre-retirees ages 45 to 80, which revealed workers’ financial approaches for retirement and identified gaps in retirement preparations. According to the survey, inflation, paying for health care and the risk of depleting savings are the biggest issues of concern for retirees.
Other findings include:
- 38 percent of pre-retirees expect to retire around ages 65-67, while 15 percent of pre-retirees do not expect to retire.
- Almost 30 percent of surveyed retirees retired under the age of 55 while another 24 percent retired between ages 55-59.
- 41 percent of pre-retirees said they plan to stop working for pay all at once, compared with 78 percent of retirees who did this.
- According to 42 percent of pre-retirees, health problems would be the primary reason for an early retirement. One-quarter of pre-retirees (25 percent) and nearly the same amount (27 percent) of retired respondents said disability or no longer being able to cope with the physical demands of the job would lead to an early retirement.
- Just 36 percent of pre-retirees have a financial plan, compared with 67 percent of retirees who have a financial plan.
“The SOA report compares what individuals plan to do to in retirement versus the reality of what decisions retirees actually made,” said actuary Anna Rappaport, FSA, MAAA, and Chair of the SOA’s Committee on Post-Retirement Needs and Risks. “Many people may not be able to physically work full time into their later years, or they may be faced with unexpected risks and shock events impacting their savings and retirement income. While there is no one solution, individuals need to plan ahead for the multitude of probabilities, from how long they could live, to how much more money they or their spouse may need to avoid outliving their assets.”