Benefits

Changing View of Retirement Calls for Changed Planning

June 9, 2014 (PLANSPONSOR.com) – A new definition of retirement means advice and education cannot be just about accumulating a certain amount of savings.

By Jill Cornfield editors@plansponsor.com | June 09, 2014
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Nearly three out of four (72%) pre-retirees older than 50 say their ideal retirement will include work—often in new, more flexible and fulfilling ways, a study from Merrill Lynch finds.

The common thinking on retirement is that it’s a sedentary, fixed time of life, says Ken Dychtwald, CEO of Age Wave, which partnered with Merrill Lynch for the research. “Work in Retirement: Myths and Motivations” had some surprising findings, with half (47%) of current retirees having worked or planning to work during their retirement years. “Incredibly, three-quarters of Boomers said that continued work would be extremely important in their ideal retirement,” Dychtwald says.

But they didn’t intend to continue in the same career path. They redefined work altogether, Dychtwald tells PLANSPONSOR. Even before actually reaching retirement, they were envisioning new careers. It’s not surprising, he points out. After all, Baby Boomers famously have reinvented themselves, changing college majors with some frequency, changing spouses and religions. “They are far more likely to reinvent themselves again and again than previous generations,” Dychtwald observes.

More than half surveyed (60%) said they wanted to try something new, Dychtwald says, describing this as “absolutely stunning.” When his grandparents reached retirement age, they were not thinking of a new career, he says, but these days, “a bookkeeper somewhere is dreaming of opening a coffee shop. Someone else is thinking of being a teacher. A financial adviser might like to write a novel.” People no longer see retirement as the end of work, nor do they desire a leisured life.

While money and financial security remain important motivations for retirement careers, nearly half (48%) say continued “stimulation and satisfaction” are the main reasons they want to work in retirement. “Older workers have such a powerful storehouse of knowledge and skills, and companies are waking up to this opportunity. We’re now seeing a more gradual fadeout of a person’s working career and hopefully a better harnessing by companies of what older workers have to offer,” said Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch, during a press call when the first of three reports from the study was released (see “Financial Resources for Retirement Changing”).

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