Significant differences exist between the attitudes and expectations of Americans who are currently working vs. those already retired, according to the most recent findings from Northwestern Mutual’s 2014 Planning and Progress Study.
Download Planning and Progress 2014 - Retirement Redefined
Most notably, the research suggests that substantial changes in retirement age and lifestyle are on the horizon, people expect to work longer, but a sizable number will do so by choice rather than necessity. Others – and there are plenty of them – aren’t as fortunate and don’t feel they’ll have the luxury of choice.
- The average age they retired was 59
- The large majority (72%) say they are completely retired from working
Among those still working:
- The average age they expect to work until is 68 (nearly a decade longer than the retirees in the study)
- Nearly half (45%) say they will continue to work in retirement, not because they have to but because they want to
Sizable numbers of others who are still working are either uncertain about when they’ll retire, or know they don’t have many choices:&
- One in five (21%) is not sure how many years he or she will spend in retirement
- More than one in ten (13%) think they’ll never be able to retire
- Nearly four in ten (38%) aged 60 and over estimate that they will have to work until age 75 or older before they can retire
Working adults tend to use words like ‘bad/poor,’ ‘bleak/dismal’ and ‘nonexistent’ to describe their vision of their own future retirement, whereas retired Americans are more apt to choose words like ‘fun/cheerful’ and ‘good/pleasant’ to describe their retired life today and tomorrow.
The gap between expectations and experience is evident in other research findings as well. For example:
- Only 37% of working adults expect they will be happier in retirement than they are now
- But 84% of current retirees say they are happy in retirement, and 60% say they’re happier now than they were when they were working
- 70% of retirees describe their lives as ‘fulfilling,’ and a large majority focus on health and fitness and stay active with charities
Still, while the majority of retirees say they lead fulfilling lives, it’s not as if they haven’t had to deal with curveballs. Half of retirees saw health care costs increase significantly in retirement, and among them 45% didn’t anticipate these expenses.
This underscores the need for planning. In findings released earlier by Northwestern Mutual, the study revealed a link between the discipline an individual brings to financial planning and their happiness in retirement. Retirees who identify themselves as “Highly Disciplined” planners are much more likely than non-planners to say that they are “happy in retirement” (91% vs. 63%).
Americans are encouraged to take the first step in getting a handle on retirement by talking to someone about their concerns. The study found that 42% of adults have never had a conversation with anyone about retirement.