The concept of a “retirement age” is going the way of the typewriter, another 20th-century relic that has been made irrelevant by changing circumstances, according to a survey by financial services company Wells Fargo & Company. Middle-income Americans now expect to work until they have saved enough to afford to retire, according to the seventh annual Retirement Survey.
Three-quarters (76 per cent) of 1,500 people said it is more important to have a specific amount saved before retirement, regardless of age, while only 20 per cent said it is more important to retire at a specific age, regardless of savings.
“The fact that the vast majority of middle-class Americans expect to work well past the traditional retirement age has significant societal and economic implications,” said Joe Ready, director of Wells Fargo Institutional Retirement and Trust. “Will people be physically and mentally able to work later in life? What will it mean for young people entering the workforce? And, how does our system of retirement savings need to be reformed to help reduce the savings gap?”
The survey also found:
•one-quarter (25 per cent) of Americans said they will need to work until at least age 80 to live comfortably in retirement
•three-quarters (74 per cent) expect to work in their retirement years, including 39 per cent of all respondents who will need to work to make ends meet or maintain their lifestyles, while 35 per cent say they will work because they want to, rather than out of financial need
•of those who will work in retirement, 47 per cent said they will do similar work to their pre-retired years, while 42 per cent said they will work in a position that requires less responsibility.
Americans have saved, on average, only seven per cent of their desired retirement nest egg — a median of US$25,000 in retirement savings versus a median retirement goal of US$350,000, found Wells Fargo. Fewer than two-thirds (29 per cent) of people in their 60s have saved less than US$25,000 for retirement.
“For several years now, we’ve seen that Americans are undersaving for retirement and a majority do not trust the stock market as a place to invest for retirement,” said Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust. “However, we did find a bright spot among middle-class Americans — more than three quarters do not want to retire with mortgage debt. This is an important goal, particularly for younger Americans.”
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