Most investors approaching retirement say traditional retirement won’t be possible for them.
That’s according to a January survey of 2,000 investors by retirement research firm Nationwide Mutual, which found that a majority of investors aged 55 to 65 said they won’t be able to stop working at 65. Most also said they expect to do so. face more challenges in retirement than past generations.
Rethinking retirement
Traditionally, 65 is the target age for retirement, but it is becoming an increasingly ambitious goal for the average American. People are living much longer these days, and with the rising cost of living, workers are struggling to save enough to live out their golden years comfortably.
This is becoming a big problem in a landscape where personal savings have all but replaced employer-managed pensions, which provide a guaranteed income for life. According to a report released this year by the National Institute on Retirement Security, more than half of U.S. adults worry they won’t be able to achieve financial security in retirement.
Pre-retirement investors with assets of $10,000 or more are also concerned. According to the Nationwide Mutual survey, nearly 70% of investors aged 55 to 65 said that retiring at 65 is unrealistic for them. A similar share (67%) said they expect to face more challenges in retirement than previous generations.
Pre-retirement investors weren’t very confident about their future Social Security benefits, either. More than a quarter said they expect to receive less Social Security income than they previously expected.
“Many of us watched our parents and grandparents enjoy a smooth transition to a secure retirement fueled by traditional retirement benefits,” said Eric Henderson, president of Nationwide Annuity, in a press release. “Today’s investors have a hard time imagining this for themselves as they grapple with inflation and worries about running out of money in retirement.”
Modification of (retirement) plans.
Due to growing barriers to a secure retirement, more than 40% of pre-retirement investors surveyed said they would continue to work in retirement out of necessity. They also reported that their retirement plans have changed in the past year, with 22% saying they expect to retire later than expected.
This is in line with 2023 research from the Pew Research Center, which found that 19% of Americans aged 65 and older were participating in the workforce compared to 11% a few decades ago. Similarly, a September study by investment management firm T. Rowe Price found that 20% of retirees returned to work full-time or part-time.
However, that’s not all seniors are doing to increase their retirement income. More than a quarter of pre-retirement investors surveyed by Nationwide said they plan to live frugally to fund their retirement goals, with 41% saying they avoid non-essentials like vacations, jewelry and shopping sprees to save more.
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