How confident do you feel about retirement? If it's a source of concern — or even anxiety — you're definitely not alone. At Premier, our retirement planning advisors address these fears every day.
In fact, a 2014 study found that 84 percent of Baby Boomers and 92 percent of Gen Xers feel like there's a retirement crisis in America; only 16 percent of those surveyed feel that traditional retirement, i.e. leaving the workforce at age 65 and living the lifestyle they want, is even possible. Given that both these generations' employment security, savings, investments, and debt were heavily impacted by the economic crash of 2008, it's easy to understand why so many Americans between ages 35 and 67 hold such a pessimistic outlook.
Are you feeling confident about your retirement?
Retirement Planning Advisors: Is Retiring at 65 a Realistic Option?
Given that only 16 percent of Boomers and Gen Xers feel that retirement at age 65 is realistic, it's important to identify a modern definition of "retirement." Much has changed since the idea of "traditional" retirement emerged. No longer can most workers depend on the promise of a pension to pad their income during their golden years. Plus, with life expectancies hitting record highs, retirees are living much longer, and that means the need for more savings. Add in the rising costs of healthcare, and it's easy to see why the definition of retirement is changing.
For many, the idea of leaving the workforce at age 65 isn't that attractive, especially when considering the option of living frugally during the younger years in order to accrue a large nest egg for later in life. Instead, the focus is on accruing an adequate amount for retirement, while still enjoying life today. These shifting attitudes vary by generation; surveys indicate that half of Gen Xers prefer to enjoy life and live for today, as compared to 61 percent of Boomers who choose to save for tomorrow and live with less today.
These changing generational attitudes may result in people working longer, delaying retirement. Some may also choose to save less now and live a less expensive lifestyle in retirement.
Confidence and Personal Wealth Management
Feelings of confidence (or lack thereof) about readiness for retirement may also hinge on your current financial situation. If you're doing well, are making a comfortable income, and feel positive about your ability to set aside money for the future, you're more likely to feel positive and confident about retirement. However, if you're living outside your means, carrying heavy debt, or are unable to set aside savings, it's likely that you're not feeling too great about your retirement prospects, either.
Further redefining the definition of retirement, many people plan to continue working well into their 60s and beyond. An Age Wave survey of pre-retirees found that 72 percent plan to continue working at least part-time into traditional retirement age.
While increasing life expectancy drives some of these changing attitudes, other influential factors may include:
- Disappearing pensions; a shift to employee-funded retirement savings accounts, such as IRAs and 401(k)s
- Economic uncertainty; though the economy has improved, the recent recession has increased feelings of financial insecurity for some
- New visions of retirement; many find fulfillment and social engagement through work and don't wish to stop
Do you feel confident about your retirement? Speaking to a retirement planning advisor can help you ensure that you're on the right track.