Surveys: More plan to delay retirement
Workers and business owners expect to work longer because of the recession. That may not be bad.
Here comes another survey demonstrating the effect of the recession on workers: 40% are planning to retire later than they had planned just two years ago.
And the largest group of those who are delaying retirement are older workers and those in poor health, according to a new survey by Towers Watson, a company that manages employee benefits. This assumes, of course, they have a choice and aren't forced into retirement by layoffs or health problems.
Health insurance is a major issue for these workers. More than two-thirds of those planning to delay retirement said they wanted to keep their health care coverage. A total of 61% blamed a decline in the value of their 401k retirement savings. Post continues after video.
David Speier, a retirement consultant at Towers Watson, said:
The economic crisis has had a deep effect on employees' attitudes toward retirement and especially on risk. Despite the signs that some employees are saving more, spending less and reducing debt as the economy stabilizes, workers continue to have a fear that they won't be able to afford retirement -- and that will have significant implications on companies' ability to plan their future workforce needs.
A survey of business owners by Wells Fargo found similar sentiments, with 69% of business owners not planning to retire or cut back work until they were 65 or older. That was up 17 percentage points since 2007 and 28 points since 2005.
"These results tie closely to what we are seeing from an overall retirement planning picture with most consumers expressing that they are delaying their expected retirement an average of three additional years,” said Karen Wimbish, head of Wells Fargo Retail Retirement.
The Towers Watson survey did find that people were taking steps to improve their financial futures:
- 63% are actively paying off their debts, up from 33% in 2009.
- 54% are cutting back on daily spending.
- 34% are increasing their monthly savings, up from 19% in 2009.
- 37% of employees with a 401k plan intend to increase contributions, and 51% plan to keep contributions at the same level.
Interesting, the survey found that younger workers are willing to forgo pay and benefits now for guaranteed benefits when they retire.
Delaying retirement three years is an excellent financial move, writes Steve Vernon at CBS MoneyWatch's Money for Life blog. He does the calculations for the fictional Joe Hardworker, providing tools you can use to make your own calculations.
Has the recession changed your retirement plans? Has it spurred you to save more? Do you feel secure about your retirement savings? Or are you feeling less ready for retirement than ever, even if you're approaching that age?
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