25% plan to delay retirement until 80

[JustCurious]

NEW YORK (CNNMoney) -- A quarter of middle-class Americans are now so pessimistic about their savings that they are planning to delay retirement until they are at least 80 years old -- two years longer than the average person is even expected to live.

It sounds depressing, but for many it's a necessity. On average, Americans have only saved a mere 7% of the retirement nest egg they were hoping to build, according to Wells Fargo's latest retirement survey that polled 1,500 middle-class Americans.

While respondents (whose ages ranged from 20 to 80) had median savings of only $25,000, their median retirement savings goal was $350,000. And 30% of people in their 60s -- right around the traditional retirement age of 65 -- that were surveyed had saved less than $25,000 for retirement.

As a result, many people aren't in a hurry to quit their day jobs.
Three-fourths of middle-class Americans expect to work throughout retirement. And this includes the 25% of Americans who say they will "need to work until at least age 80" before being able to retire comfortably.

25% of Americans expect to wait until age 80 to retire - Nov. 16, 2011

 

[Gone4Good]

US Life Expectancy . . . 78.1 years

 

[palomalou]

On average, Americans have only saved a mere 7% of the retirement nest egg they were hoping to build,

That seems a touch unfair, given the recent efforts of American government and business to screw the populace. They'd have a far sight more had the market paid even half of its average. Retirement calculators would have been telling the folks that they were in decent shape even 7 years ago. I'll grant that many people, perhaps even most, have not saved enough, but it's hard to see what you DID save just wave bye-bye. Not exactly motivational.

 

[W2R]

And 30% of people in their 60s -- right around the traditional retirement age of 65 -- that were surveyed had saved less than $25,000 for retirement.

I wonder if this 30% are those who got grandfathered in to the older retirement plans with substantial pensions.

If not, then this is pretty sad. I agree that while sometimes small savings are due to character flaws, it is also true that often small savings reflect situations that the individual could not foresee or control. We have all been affected by such situations from time to time in our lives, and have had to do some pretty fancy maneuvering to recover. But some didn't have a good outcome, and there but for the grace of G*d... (shiver)

 

[braumeister]

As a result, many people aren't in a hurry to quit their day jobs.

My guess is many of them are also investing more heavily in lottery tickets.

 

[MichaelB]

Not much detail in the article. What I would like to see is a survey that shows how people of a certain age view retirement compared with 1) how they viewed it at an earlier age, and 2) how people of similar age viewed retirement in previous years.

 

[W2R]

Not much detail in the article. What I would like to see is a survey that shows how people of a certain age view retirement compared with 1) how they viewed it at an earlier age, and 2) how people of similar age viewed retirement in previous years.

Honestly, I viewed retirement as a complete and utter impossibility, and a cruel joke when I was in my early 50's. I am 63 now, and retired.

 

[traineeinvestor]

Thanks for posting.

I thought the article itself was rather weak - provocotive in the scare mongering sense and shallow in that it did not look at people's total financial situation or consider the practicalities of working until 80 in any detail (or at all). The comments were more informative than the article itself.

While it is likely that more people will work as long as they are physically and mentally able to (and can find a job) than may have been the case in the decade or three prior to 2007, we are still looking at a retirement landscape where more people are actually able to retire with a degree of financial independence than was historically the case. In other words, the benchmark for comparison purposes is the historical high water mark.

 

[glippy]

Well, if retirement came about because people were basically being put out to pasture because they just physically couldn't work anymore, and nowadays people actually can continue to (theoretically) work into their old age since a lot of jobs don't involve much physical labor, perhaps there isn't really a need for retirement for a lot of people.

Retiring to a life of perpetual gardening and travel may just be a product of a bygone golden era when we could afford generous pensions. For the upcoming generations retirement plans will probably largely consist of lowering expenses to social security benefit levels, or "work until you're so decrepit you qualify for disability", and anything else being strictly reserved for the disciplined LBYM-ers.

 

[obgyn65]

Thanks for posting. This is an amazing quote, quite scary really.

planning to delay retirement until they are at least 80 years old -- two years longer than the average person is even expected to live.

 

[jwkde]

i think this is a good for those of us focused on fiRE! less people to get in our way when we want to do something

 

[ratto]

The full survey article can be found at https://www.wellsfargo.com/press/2011/20111116_80IsTheNew65.

"On behalf of Wells Fargo, Harris Interactive Inc. conducted 1,500 telephone interviews of middle class Americans in their 20s, 30s, 40s, 50s, 60s and 70s, surveying attitudes and behaviors around planning, saving and investing for retirement. The survey was conducted August 9 – September 23, 2011. To target the middle class, the survey included only respondents who fell within specified income and wealth brackets. Those age 25 to 29 had 2010 household income of $25,000 to $99,999 and household investable assets of $99,999 or less. Those age 30 to 75 had 2010 household income of $50,000 to $99,999 or household investable assets of $25,000 to $99,999. The lower limits for 20-somethings were used to reflect the early stage of their careers."

"Figures for education, age, gender, race/ethnicity, region, household income, investable assets, number of adults in the household, and number of phone lines (to adjust for probability of selection) were weighted where necessary to bring them in line with their actual proportions in the population."

Based on the total number of factors being weighted in, 1500 sample size is really not big enough. Nevertheless, there are still some intriguing observations.

"Three-fourths (74%) of middle class Americans expect to work in their retirement years, including 39% of all respondents who will need to work to make ends meet or maintain their lifestyles".

What are the "lifestyles" at here, LBYM or LOYM already? IMHO, 80% of pre-retriement income target guideline is high.

"Older generations seem less concerned about retiring without mortgage debt. While 87% of those age 25 to 29 say it is “very important” to pay off mortgage debt, only 40% of those ages 60 to 75 agreed."

This is a little surprise. I thought it should be another way around.

"Asked to name their biggest fear about retirement, 37% say they have “no fears,” because “it will work itself out,”"

"When asked how much they will withdraw each year from their retirement savings in Retirement, 22% say 5% or less annually but 56% of the respondents indicate they would withdraw 6% or more on an annual basis."

With such optimistic views, ER seems to be a very promising option.

 

[l2ridehd]

I think some of this has to do with the replacement work force. Go back to the 50's and 60's and the US had 24 college graduates in science and engineering for every 1 degree in law and arts. Today we have 12 in the law and arts for every science and engineering degree. The replacement work force does not exit to replace the work force retiring. So where companies were giving incentives for older workers to leave, they are now seeking to get those workers to stay. Part of our unemployment problem is a skills mismatch with the available workforce.

India and China on the other hand graduate 642 science and engineering degrees for every lawyer. Does not bode well for our future as a nation.

 

[makincaid]

"To target the middle class, the survey included only respondents who fell within specified income and wealth brackets. Those age 25 to 29 had 2010 household income of $25,000 to $99,999 and household investable assets of $99,999 or less"


If they only interviewed people with investible assets of less than $99k, it seems as if they are purposely excluding those who ARE prepared. (Of course, a few blessed souls will have pensions.) This survey seems highly skewed to me. Am I missing something here?

 

[ziggy29]

I know a lot of the more outspoken "ants" don't like to hear it, but from a public policy standpoint the unemployment issue is VERY much tied to the retirement issue. The harder it is for the average person to retire, and the less support they have from pensions, SS and health insurance, the higher unemployment will remain because these folks simply CAN'T retire and free up their job for other (mostly younger) folks.

When we have less of a "safety net" for retirements, perhaps because we collectively oppose gifts to "grasshoppers" who didn't adequately prepare, the more we are preventing people who are older and "close" to being able to retire from actually doing so, and we end up paying out more in unemployment benefits anyway. We have to pay either way, and all else being equal I'd rather see my taxes paying for retirement benefits than unemployment benefits.

We won't reduce unemployment much unless we can facilitate more retirements.

 

[mickeyd]

Is 80 the new 65?

I'll be honest, I do not know a sole who plans on working until age 80, but this survey claims otherwise. I read to make myself smarter. Or it could just be Wells Fargo trying to drum up bisness?

About 25% of middle class Americans expect to work until age 80, according to Wells Fargo’s seventh annual retirement survey, the company said in a press release. Meanwhile, 74% of the 1,500 respondents Harris Interactive surveyed by telephone said they expect to work in their retirement years, including 39% who said they would need to work to make ends meet. Another 35% said they would work because they want to, rather than out of necessity.

Wells Fargo survey finds more and more Americans are delaying retirement and pushing the anticipated age back to 80 from 65 - Financial Planning. - Financial Planning

 

[Animorph]

Kind of tough if some medical problem prevents you from working.

 

[MichaelB]

Threads merged.

 

[MichaelB]

I'll be honest, I do not know a sole who plans on working until age 80, but this survey claims otherwise. I read to make myself smarter. Or it could just be Wells Fargo trying to drum up bisness?

Not sure if they are drumming up business, but they do have a vested interest in people looking to them for a solution.

I think a lot of the responses in that survey (and others) are unfocused, something people really haven't yet faced or dealt with. Once people do focus, this can happen.

Honestly, I viewed retirement as a complete and utter impossibility, and a cruel joke when I was in my early 50's. I am 63 now, and retired.

 

[unclemick]

I was layed off (1993) at age 49. Ticked me off so much that I morphed into an ER.



heh heh heh - unemployed slacker had less cache.

 

[Lazarus]

My Dad is 78 and still working. Kind of hard to talk to him about ER.

 

[martyb]

My dad was still working at 78 too. Before he turned 79, he was gone. Not much of a retirement, although he seemed happy being a one-man barber shop. Kind of like Floyd in Mayberry. Old timers sitting around the shop, watching tv, shooting the breeze. Some of his customers didn't hardly have a hair on their heads...it was more of a social gathering.