A new study commissioned by Bankers Life Center for a Secure Retirement (CSR) sought to find out what Baby Boomers thought retirement would be like…and what it’s actually like.
To do that, the study polled more than 1,000 nonretired Baby Boomers and nearly 2,300 retired Boomers between the ages of 51 and 69.
The data reveals some huge gaps in expectation vs. reality. If your retirement planning involves you working to produce some portion of your retirement income, odds are you should temper your expectations. You may not get the pay or work flexibility you want or deserve.
Brace for a Smaller Paycheck
The CSR study revealed some eye-opening numbers on what upcoming retirees can truly expect to get paid when they “re-enter” the workforce:
“While more than half of nonretirees would be willing to take a pay cut for their work in retirement, only two in 10 (21%) would be willing to work for much less per hour, and a quarter (26%) would not be willing to work for less at all. These expectations don’t match the reality— more than half (53%) of currently employed retirees report making much less per hour now than before retirement, the study cites.”
It’s especially unfortunate that Boomers think they can command higher wages than they actually can, given some rather depressing recent stats on retirement savings:
“Nearly 40 million working-age households have no retirement account assets, as in a 401(k) or IRA, according to the National Institute on Retirement Security…”
Moreover,
“The average working household has virtually no retirement savings, the NIRS says. Indeed, when all U.S. households are included — that is, both households with and without retirement accounts — the median account balance is $2,500 for all working-age households and $14,500 for near-retirement households.”
In other words, Boomers need to save, save, save!
You May Not Be Able to Work Like You Want To
The other unfortunate find of the CSR study relates to the flexibility of your job in retirement:
“In terms of work arrangements, nearly all (94%) nonretirees who plan to work in retirement would like some type of special work arrangement, such as flex-time (56%), telecommuting (20%), compressed work schedule (17%) or job-sharing (14%). Yet only about one-third (37%) of currently employed retirees report having such an arrangement.”
While we may deserve to enjoy some special treatment in our Golden Years, employers apparently don’t feel the same way.
This is all a little bleak, but thankfully there were a few uplifting takeaways from the study as well.
The Good News
The good news is that having unrealistic expectations doesn’t always mean your expectations are unreasonably high. Apparently it’s easier to find a job in retirement than most people think:
“While 80 percent of employed retirees report that it was easy to find a job in retirement, more than three in five (61%) middle-income Boomers feel there are inadequate job opportunities for retired workers.”
As for what type of job to take in your later years? Advice from retirees can be applied to all age groups: “Find work you like and enjoy.”
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
