Workers, shaken by the realities of the Great Recession, have adjusted their visions of retirement according to the 13th Annual Transamerica Retirement Survey released this week, results of which are based on the responses from 3,600 American workers.
The survey 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.
"American workers are adjusting their expectations of retirement, including working past age 65 and planning to work part-time in retirement," says Catherine Collinson, president of the Transamerica Center for Retirement Studies. "American workers have reshaped their vision of retirement, now it's time to provide an updated roadmap to help them achieve retirement income to last throughout their lifetime."
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.
"Working past age 65 is an important opportunity to continue to earn income, save more, and help to alleviate a retirement savings shortfall; however, it's 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," says Collinson.
Many workers (44 percent) expect to rely on savings from 401(k) or similar retirement plans as their primary source of income when they retire. An overwhelming 90 percent of respondents cited an employee self-funded plan as important, and more than half of respondents (53 percent) would be likely to leave their current employer for a nearly identical job with a similar employer for better retirement benefits.
A majority of workers (62 percent) desire information and guidance about retirement planning from their company. When asked what could motivate them to learn more about saving for retirement, most respondents (52 percent) cited a good starting point or educational materials that are "easier to understand."
This article was reprinted with the permission of Employee Benefit News.