Van Leer is referring to a new index recently released by Sun Life Financial. The Unretirement Index, which tracks the changing attitudes and expectations American workers have regarding retirement, reveals some surprising results as the median age of Americans rise and more Baby Boomers are deciding when to take Social Security and when to exit the workplace. Sun Life defines “unretirement” as working at least 20 hours per week after the age when one is eligible to receive full Social Security benefits.
According to the Index, in which 1,515 people working either full- or part-time, and representative of the U.S. working population between the ages of 30 and 66, with assets from less than $100,000 to greater than $500,000 (not including the net worth of the person’s place of residence) were interviewed, almost half (48%) believe they will still be working at the traditional retirement age of 67, and four of the five top reasons given had nothing to do with income. Instead, the most cited reason for continuing to work (83%) was “to stay mentally engaged”—a finding consistent across all income levels, gender, and age demographics. The study was conducted in August 2008 when there was plenty of financial uncertainty in the markets, though that uncertainty has increased since then with the spate of nationalizations, bankruptcies, shotgun marriages, and bailout legislation to address the global financial crisis.
“We were surprised that four out of the five reasons that people plan to continue to work beyond age 67 weren’t financial in nature,” notes Van Leer. “It used to be all about fear in not saving enough, but people working into their 70s want to stay mentally engaged, love their jobs, want to further their careers, and want to be close to people. Those four reasons were very compelling and seem to withstand all kinds of economic cycles,” she adds. In fact, a significant portion of those with the means to retire are part of the group deciding to stay in the workforce. Nearly 40% of workers surveyed with household assets of more than $500,000 still plan to work at least part-time.
The Unretirement Index also examined factors including economics, healthcare, personal finance, and government benefits and their potential impact on Americans’ plans for retirement. There were different levels of optimism about when generational groups plan to retire and what they expect to rely upon in retirement. Members of younger generations more often said they were planning to retire at age 67 than their older counterparts, and 58% of workers age 30-39 believe they will be retired at 67 compared to only 45% of those aged 60 and older. Furthermore, the younger generations have little confidence that government benefit programs like Social Security and Medicare will be available when they retire; 63% of workers age 30-39 don’t believe that Social Security will be available and also cite employer healthcare benefits as a reason to work past age 67.
In response to these results, Sun Life Financial said it is taking steps to provide products that cater to the varying retirement choices of Americans. “We came out with a product called Income on Demand where individuals don’t have to take a stream of income when they retire,” says Van Leer. “Instead, they can store it up and take it in a lump sum to help launch the business they want to start in their unretirement or do some extra traveling.”
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