More Americans plan on working longer and retiring later
Until recently, early retirement was a typical goal for many workers. These days anxiety over health care costs and income stability are pushing back planned retirement ages.
A survey done for MFS Investment Management found that workers planning for retirement have selected significantly higher retirement ages than did the average current retiree.
Pre-retirees expect to work to age 66, on average, while those already retired did so at an average age of 59, the survey found.
Surprisingly, affluent pre-retirees are more likely to say they will retire later or work during retirement. Twenty percent of those with $500,000 or more in retirement assets said they do not plan to retire, while only 8 percent of those with assets of $100,000 to $250,000 had made the same decision.
Half of pre-retirees in the top asset category expect to work at least part-time after retirement age.
Even so, affluent savers were more confident in their ability to retire than those with lower asset levels.
Health cost fears
The costs of health care were the top worry of retirees and pre-retirees alike. Three in ten were very concerned about unexpected health expenses.
Concern over health insurance premiums may be one of the reasons many pre-retirees plan to retire at older ages than did current retirees.
A second major fear centered around the possibility of cutbacks in Social Security benefits, which account for about 39% of the average retiree’s income, MFS said.
Advice to the young
The most important advice pre-retirees and their retired counterparts offered was to start saving early and to save aggressively.
However, when it came to asset allocation, retirees were not taking their own advice.
While many said they worry about the effects of inflation on their retirement incomes and said they thought they may be invested too conservatively, 40% said the last bear market pushed them to reduce their stock market exposure.
On a bright note, those who began planning earlier for retirement were more confident in their futures.