| December 18, 2015

Research of the Week: Retirement Expectations vs. Realities

Workers expect to retire later, but most retirees actually reached it earlier.

Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…

The interesting study

Each year the Transamerica Center for Retirement Studies puts out a report that tries to capture the real state of retirement in the U.S. today. Last year’s study reported that many Baby Boomers planned to work past retirement or not retire at all.

Interestingly, this year’s report seems to support the idea that last year’s expectations aren’t exactly panning out in the real world. In fact, the overall theme of the report this year revolves around the disconnect between worker’s retirement expectations and the reality actual retirees face once they start moving into their golden years.

 

The big results

According to the survey, 67 percent of workers age 50 and over don’t plan to retire at 65 – or at all. Most don’t even plan to hit the median retirement age of 67. On the other hand, 91 percent of retirees surveyed reported they had actually retired at the median age of 62.

The fascinating details

So while workers plan to at least work part-time well into retirement, the reality is that doing so is often tough to negotiate and make work in a real world scenario. So 54 percent of workers 50+ want to work at least part-time, only 5 percent of those who are currently retired work at all and only 2 percent are unemployed but looking for work.

Similarly, age 50+ workers view retirement as a transition, of moving from full-time to part-time employment or transitioning into a consulting role. In other words, they imagine working until they can’t work anymore. In reality, retirees are far more likely to stop working entirely and pursue retirement goals full-time. Almost half (46 percent) stopped working fully once they reached a specific age or retirement savings goal.

Of those who retired earlier than they expected, 66 percent say they did so for employment-related reasons. These range from job loss and organizational changes like downsizing to receiving a buyout from the board. Only 27 percent quit working for health reasons and only 11 percent for family obligations, such as become a caregiver. Meanwhile, 16 percent retired earlier because they realized they had the money to do so.

What you can do

If you’re building ongoing work into your retirement plan – to either avoid saving more now or because you don’t have the means to save – you may want to reconsider the strategy and rework your budget to find ways to start saving while you can. The results show that the will to work when you’re reaching retirement age doesn’t always mean that you’ll have the opportunity.

“Employers may not be as willing to work with you as you’d hoped once you start approaching retirement age,” Consolidated Credit President Gary Herman explains. “Older employees are usually at the top of the income earning for their positions and aren’t likely to be with the company for the long-haul. For these and other reasons, right or wrong, employers may not be willing to offer the opportunities that many pre-retirees just assume will be there.”

Herman advises that workers need to get their finances organized in the here and now to ensure they have the means to save for retirement in their mid-60s.

“Debt payments are often the primary roadblock for people saving for retirement,” Herman says. “If you have challenges with high-interest credit card debt that are preventing you from saving effectively, consider using a debt consolidation option like a debt management program to lower your total monthly payments by 30-50 percent. This would provide an immediate adjustment in your cash flow to give you the means to save now.”

For more information on retirement savings and how to develop a plan that allows you to save in spite of challenges like debt, visit Consolidated Credits Retirement Survival Guide

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

All Consolidated Credit counselors are certified personal financial counselors (CFC) We've helped 5 million people get out of debt! Call us today and see what we can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

The National Industry Standards for Homeownership Education and Counseling are a set of guidelines for quality homeownership and counseling services. Industry professionals who adopt these standards can be trusted to provide consistent, high quality advice.
Click here to learn more.

Consolidated Credit Consulting Services, Inc. has been verified as the owner or operator of the Web site located at www.consolidatedcredit.org. Official records confirm Consolidated Credit Consulting Services, Inc. as a valid business. Call us today and see what we can do for you.

Consolidated Credit is a Certified ISO 9001 company, as verified through Bureau Veritas Certification.

Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Consolidated Credit is proud to be an ANAB accredited member. Accreditation by a recognized and respected body such as ANAB ensures the impartiality and competence of our company. To see what we can do for you, give us a call.

U.S. Department of Housing and Urban Development - HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. Consolidated Credit is proud to be a member of HUD and also part of the Hope Now Alliance.

You can save!

With this amount of debt, you'd pay around $xx.xx on a DMP.

FREE Debt Consultation