Transamerica Study Shows American Workers Shifting Expectations of Retirement, Reveals Need to Redefine ‘Retirement …

Posted: May 17, 2012 at 1:17 am

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American workers, shaken by the realities of the Great Recession, have adjusted their visions of retirement according to the 13th Annual Transamerica Retirement Survey released today by the non-profit Transamerica Center for Retirement Studies (The Center). The Center surveyed more than 3,600 American workers and found that the majority of workers plan to work past age 65 (56 percent) and the majority (54 percent) plan to continue working after they retire. Despite workers demonstrated commitment to saving, just 39 percent believe they are building a sufficient nest egg, thereby underscoring the need to redefine retirement readiness in a way that is better suited to these new realities.

For the past few years, the annual Transamerica Retirement Survey has seen an emerging trend of workers who plan to work past age 65, including some workers who do not plan to retire. This years survey found that these expectations are prevalent to varying degrees among workers of all age ranges, not just older workers.

American workers are adjusting their expectations of retirement, including working past age 65 and planning to work part-time in retirement, said Catherine Collinson, president of the Transamerica Center for Retirement Studies. American workers have reshaped their vision of retirement, now its time to provide an updated roadmap to help them achieve retirement income to last throughout their lifetime.

Following careful analysis, The Transamerica Center for Retirement Studies proposes the following definition of Retirement Readiness:

A state in which an individual is well-prepared for retirement, should it happen as planned or unexpectedly, and can continue generating adequate income to cover living expenses throughout his/her lifetime through retirement savings and investments, employer pension benefits, government benefits, and/or continuing to work in some manner while allowing for leisure time to enjoy life.

Plan for the Best, Prepare for the Unexpected

According to the survey, more than half of workers polled (57 percent) have a retirement strategy, including 12 percent who have a written plan and 45 percent who have a plan that is not written down. Of those with any form of strategy, only 15 percent have factored in contingency plans for retiring sooner than expected and/or savings shortfalls. Meanwhile, among all workers, many still leave their future retirements up to guesswork; when asked how they estimated their savings needs for retirement, 47 percent admitted to guessing.

The effects of the Great Recession have been reflected in workers changing expectations of retirement. Working past age 65 is an important opportunity to continue to earn income, save more, and help to alleviate a retirement savings shortfall; however, its more important than ever for workers to have a retirement strategy including contingency plans if they are forced to retire sooner than expected. The fact that so few workers have a backup plan is a scary reality that must be addressed, said Collinson. Lifes unforeseen circumstances, such as a job loss or health issues, can have a devastating impact on the best laid plans. The what if scenarios are mission critical for American workers of all age ranges to include in their long-term preparations.

A significant majority (84 percent) prefers a do-it-yourself decision-making style regarding saving and investing for retirement, including nearly half (49 percent) of workers who seek advice but make their own final decisions and 35 percent who do their own research and make their own decisions. Despite these decision making styles, most workers (70 percent) agree that they do not know as much as they should about retirement investing.

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Transamerica Study Shows American Workers Shifting Expectations of Retirement, Reveals Need to Redefine ‘Retirement ...

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May 17th, 2012 at 1:17 am

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