'New Frugality' Starts to Show Cracks

BOSTON ( TheStreet) -- Americans have become more realistic about retirement, with almost half of those eligible for Social Security now planning to work longer than they had expected.

But despite talk of retirement-age frugality, a new survey by Charles Schwab ( SCHW) found that 95% of respondents say they won't be willing to spend less in retirement after all.

People "are coming to the realization they want to live a good lifestyle in retirement," even if it means they have to save more and work longer, says Stacy Hammond, director of Real Life Retirement Services at Charles Schwab. "Retirement is going to last you 30-plus years, and the idea of tightening your belt throughout retirement became a much less appealing option."

The findings come from a quarterly survey, the most recent of which was taken in November. It measured the attitudes of Older Boomers (born between 1945 and 1954), Younger Boomers (1955-1964), Generation X (1965-1974) and Generation Y (born after 1975).

Forty percent of Older Boomers and Generation Y, who are separated by 25 years or longer, plan to postpone their retirement date. Almost half (47%) of workers age 65 and older are prepared to work during retirement. That compares with 10% for Generation X, 11% for Generation Y and 20% of Baby Boomers (Older Boomers and Younger Boomers combined).

The change in mindset may have less to do with necessity than a desire to enjoy life in retirement. Many families were forced to live with less, scrimping on unnecessary expenditures to maintain their budget. After more than a year of fear and frugality, many realized that isn't how they want to live in their golden years. Watching friends and family downgrade their retirement expectations has made many people pledge not to let that happen to them.

"Retirement used to be quite linear, so the idea that you could kind of set it and forget it with a plan made some sense," Hammond says.

Four out of five of those surveyed have taken a more active role in retirement planning, Hammond says. That sense of control is leading to an increased optimism that the future isn't as bleak as it once seemed.

-- Reported by Joe Mont in Boston.