Financial Resources for Retirement Changing

May 6, 2013 ( - Seven out of ten pre-retirees surveyed say they would ideally like to include some work in their retirement years.

Most are seeking flexible work arrangements, such as part-time work (39%) or going back and forth between periods of work and leisure (24%), according to a 2013 Merrill Lynch retirement study conducted in partnership with Age Wave. Perhaps due to lengthening life spans, many now view retirement as an opportunity for career reinvention, with half saying they want to launch into a whole new career rather than continuing the same line of work they did in their pre-retirement years.  

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, in a press call.  

Despite an increasing number of individuals saying they plan to delay retirement, nearly three out of five retirees say they retired earlier than they expected—59% of women, 56% of men. And although early retirement has often been equated with financial success, health problems are actually the top reason for early retirement.

Health problems and the cost of health care now top the list of retirement worries—and even more so among the affluent. Just one in nine pre-retirees is completely confident in their ability to pay for their retirement health care expenses. In addition, when asked what their biggest worries are about living a long life, 72% of retirees cite serious health problems. Sixty percent say being a burden on their families and 47% indicate running out of money to live comfortably are top worries about living a long life.   

Income Sources  

The “silent generation” (ages 68 to 88) estimates that just 33% of their retirement funds come from personal savings. However, other generations are far less likely to feel they can count on government entitlement programs or employer defined benefit pensions.   

The Baby Boomer generation (ages 49 to 67) expects they will need to fund 41% of their retirement through personal savings and investments. Generation X (ages 37 to 48) expects to be personally responsible for half of their retirement funds. However, they also expect to have family tugging on their resources. Fifty-two percent expect to provide support for adult children, 35% for grandchildren, 16% for parents or in-laws and 10% for siblings.  

Forty-three percent expect to provide direct financial support, such as writing a check or providing a loan to a family member; 38% expect to provide or help a family member pay for a place to live; 30% expect to help pay education expenses for a family member; and 25% expect to pay for or help manage a family member’s health care or long-term care needs.

“When people ask if they’re going to have enough money for retirement, now they have to factor in multiple variables such as health care and aid to family members. When they’re planning for their own retirement, they need to know how these variables play into this,” said David Tyrie, head of Personal Wealth and Retirement for Bank of America Merrill Lynch, in the press call.  

Investing for Retirement  

When considering investments or insurance products for a secure retirement, 74% of survey respondents say it is important for the product to provide guaranteed income, while 73% said it is important that the product is guaranteed not to lose value. Sixty-four percent say it is important the investment or product covers the cost of long-term care, 54% want to provide income for their families if they die or become disabled and 35% want to leave money for family, community or charities. Just 21% say the potential to provider higher returns with low risk is important.  


The Merrill Lynch survey was completed in January 2013, in partnership with Age Wave, and included more than 6,000 respondents age 45 and older. Data is based on more than 3,000 responses from the general population. In addition, select study findings are based on an oversampling of an additional 3,005 affluent respondents with $250,000 to $3 million in investable assets (including liquid cash and investments, but excluding real estate). 

As part of the survey, Merrill Lynch calculated a national “Retirement Peace of Mind Index” (see “Advisers Improve Retirement Peace of Mind”).  

The study report is here.