The most recent retirement survey from State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT), indicates that 50 percent of retirement plan participants no longer see retirement as a reason to leave the workforce. Many expect a much more gradual shift from full-time work to at least part-time work in retirement. This presents a challenge to employers who need to make adjustments to how they manage talent to accommodate a mature workforce. It also shows that employers could improve benefits, such as savings boot camps and other financial literacy programs to address employees’ overall financial wellness, based on this new definition of retirement.
“There has been a major shift in the past 10 to 15 years and retirement plan participants are expecting to continue to earn in their retirement years,” said Fredrik Axsater, global head of defined contribution at SSgA. “The desire to continue working is not restricted by gender, age, savings, current income or education. This signals a big change in attitude toward retirement, and is indicative of the survey results showing that 40 percent of participants anticipate working well past retirement age because they want to work, not because they have to work.”
Survey highlights include:
- Nearly three quarters (74%) of the respondents indicate that they were satisfied with the career choices they made before retirement. However, having their dream career in retirement is still envisioned by about 10 percent of participants.
- The majority (65%) of DC participants picture themselves maintaining their current lifestyle in retirement.
- Sixty-four percent of survey respondents between 50 and 75 years recommend investing earlier to their younger selves, another indication that those in middle-age are more apprehensive about retirement.
“Plan sponsors are in an advantageous position to influence the way employees are saving and spending,” said Axsater. “Conversations about lifestyle and influencing habits at an earlier point in an individual’s career can have a major impact on retirement preparedness.”