July 31, 2019 — Nearly one-quarter (23%) of Americans say they never plan to retire, according to a poll from the Associated Press-NORC Center for Public Affairs Research. This suggests a disconnection between individuals’ retirement plans and the realities of aging in the workforce, since government data shows that roughly 1 in 5 (20%) Americans over 65 are either working or looking for a job.
The disconnect between saying they will continue to work and actually retiring often comes from outside forces. Illness, injury, layoffs and caregiving responsibilities often force older workers to leave their jobs sooner than they’d like. And that causes an unanticipated problem – they are out of the workforce before their retirement savings are up to the job.
The Retirement Confidence Survey makes the same point. The RCS identifies a lack of alignment between workers’ expectations about their age of retirement and prospects for working in retirement, compared with retiree experiences. Workers continue to report an expected median retirement age of 65, while retirees report they retired at a median age of 62. The survey has consistently found that 43 percent of retirees leave the workforce earlier than planned, with 35 percent citing illness or disability as the reason and 35 percent retiring due to changes at their company. In keeping with their income expectations, 80 percent of workers expect to work for pay in retirement, while only 28 percent of retirees report that they have actually done this.
Retirement confidence at an all-time high
The 2019 Retirement Confidence Survey (RCS) found 82 percent of retirees are confident in their ability to live comfortably throughout retirement, up from 75 percent last year and comparable to highs measured in 2005 and 2017. Furthermore, the percentage of workers who say they are very confident in their ability to live comfortably throughout retirement reached 23 percent, up from last year’s 17 percent and now reflecting levels measured more consistently in the late 1990s and early 2000s, prior to the financial crisis of 2008. Now in its 29th year, the annual RCS is the longest-running survey of its kind, and is conducted by the Employee Benefit Research Institute (EBRI) and independent research firm Greenwald & Associates. The AP-NORC poll had a similar poll question with results were not quite as optimistic as those from the RCS. In the AP-NORC poll 32% said they were either not prepared or not very prepared for retirement. Only 29% of those over age 50 said they were very prepared.
Is working longer a good thing, or a bad thing?
Meanwhile, Americans have mixed assessments of how the aging workforce affects workers: 39% think people staying in the workforce longer is mostly a good thing for American workers, while 29% think it’s more a bad thing and 30% say it makes no difference. A somewhat higher share, 45%, thinks it has a positive effect on the U.S. economy. Not surprising, working Americans who are 50 and older think the trend is more positive than negative for their own careers — 42% to 15%. Those younger than 50 are about as likely to say it’s good for their careers as to say it’s bad.
Comments? Did you leave the workforce before you intended to? Or, if you are not yet retired, at what age do you think you will retire? Do you think it is a good thing for people to stay in the workforce longer? We would love to hear your Comments below.