Last December, I embarked once again on a media tour to discuss the results of our annual Wells Fargo Retirement Study, conducted in 3rd quarter 2011. While I feel it’s imperative to get the word out on what Americans are really doing and thinking about retirement, I’m not really comfortable doing the media tour itself. I’m not one for the spotlight and no matter how often I participate in interviews I’m not sure this will ever fall squarely within my comfort zone. So imagine my ambivalence (okay, sheer anxiety) when invited to participate in CNBC’s Power Lunch with Sue Herrera .
As it turned out, all that anxiety was a wasted effort. I actually enjoyed it immensely thanks to Sue. Instead of a busy, chaotic set, we were in a more intimate setting with an unobtrusive camera. It felt more like we were meeting for coffee, simply enjoying each other’s company and conversation.
Our discussion focused on what the study told us about affluent Americans and their current state of retirement, especially those in their 60s and 70s. Somewhat alarmingly, one-third of affluent Americans between 60 and 75 years old told us they didn’t know when they would be able to retire. While it’s not unusual for those in their 40s or even late 50s to be uncertain about pinpointing a date for retirement, we generally assume those in their 60s or older have a good idea of when they will retire. Instead, many stated they may need to continue working well into their 80s. While many acknowledged they need to cut back on spending, they also indicated that they haven’t done so yet.
A few days later an article appeared in The Wall Street Journal supporting similar findings.* The author, E.S. Browning stated: “Many older Americans fear they will be working well into their 60s because they didn’t save enough to retire. Millions more wish they were that lucky: Without full-time jobs, they are short of money and afraid of what lies ahead.”
Browning noted that older Baby Boomers are trying to postpone retirement, as many find their spending habits far outpaced their thrift. He said, “With U.S. unemployment at 8.6%, and much higher among people in their teens and 20s, younger members of the labor pool accuse Boomers of refusing to gracefully exit the workplace.”
He also noted that 6.5% of workers aged 55 to 64 were unemployed in October 2011, below the national average but more than twice the jobless rate for the group five years earlier.
So the question becomes: Will older Americans be able to rely on working in retirement and for how long? Not only does the availability of jobs play a role, individual health is also a determinant. For those who may anticipate or even choose to work in their 70s or 80s, will they remain healthy enough to do so?
In coming posts I will touch on this and related topics from our survey, including savings and withdrawal rates, retirement income planning, views on housing and more.
What are your thoughts on working in retirement? Do you anticipate continuing to work? Do you view this as a realistic strategy for people in their 70s or 80s? Why or why not?
*The Wall Street Journal, Oldest Baby Boomers Face Jobs Bust by E.S. Browning, 12/19/11.