BlackRock conducted a survey of retirees, retirement plan sponsors, and workers saving in retirement plans. A few points jumped out at me:
- People expect retirement to be an active time in their lives. Currently, 47% of retirees work or volunteer because they enjoy it while 1% work for income. However, current workers have dramatically different expectations for the retirement phase. The majority, seventy percent, expect to work for enjoyment and fifteen percent expect to work for income.
- Over half of plan sponsors are not confident plan participants are saving enough for retirement.
- Current retirees in the survey were confident in their retirement. They also had the vast majority of their expenses covered by traditional secure sources of income such as Social Security and defined benefit plans.
How can we use these survey results?
- Clearly, people nearing retirement expect their lives to be different than the traditional retirement scenario. Some type of work will be a part of their lives for personal satisfaction, and for many, by necessity. We should be exploring ideas on how to make that happen before we retire.
- This may be stating the obvious, but most of us should be saving more money. Probably a lot more money.
The survey raises a lot of questions for me as well. How is the quality of life of people going to be affected when they don’t have these secure sources of income? Plainly, the practical aspect of affording necessities is a concern for many. But I believe stress levels for retirees and those approaching retirement are elevated and will continue to stay high.
Looking at the big picture—how is the economy going to be affected? (Not to mention the effect of stress on our health.) The United States had a low savings rate compared to other developed countries in the past. The high level of spending helped our economy grow at a higher rate than other industrialized countries. Will the loss of secure sources of income be a permanent drag on the economy as people are forced to save a higher percentage of their income?
You can find the survey at: 2012 BlackRock Retirement Survey