Investment firms and retirement pundits have beaten the drum incessantly about how ill prepared Americans workers are for their golden years. Now, perhaps predictably, we’re hearing a lot about employees expecting to work when they “retire”—though without a great deal of interest from employers in hiring them.
A new study published last week by Merrill Lynch reveals that 71 percent of the respondents expect to work in retirement, with a bulk of them looking for part-time jobs or seeking special training to get into a new field. Among those who expect to work in retirement and eventually stop, the average tenure of their retirement career is almost 10 years, the study says.
At the same time, employers don’t seem to be thinking a great deal about retirees. Asked how equipped their companies were for the wave of boomers headed into retirement, a mere 24 percent said their companies were “on track” to handle them. Some 27 percent said they were “in the midst of preparing,” while 17 percent said they were just getting off the ground, and 31 percent said their companies hadn’t given it much thought.
Indeed, employers seem to be more interested in pushing older workers out the door than welcoming them in. While 61 percent of employers surveyed have assessed what initiatives will attract younger talent, only 38 percent have identified actions to help retain older workers.
“Multiple generations report cycling in and out of work and pursuing a new career in later life as the retirement ideal,” says Michael Falcon, head of the retirement group at Merrill Lynch. “Companies need to be aware of this new concept of retirement in order to prepare for the new workforce realities.”
The reasons for this sea change vary, but perhaps the most obvious is that they want to continue to earn a paycheck. That makes a lot of sense since most aging boomers have been scolded about their failure to sock away enough dough to be comfortable.
“There are serious questions about the ability of Americans to afford retirement,” said John Murphy, chairman, president and CEO of OppenheimerFunds, while delivering a keynote address at the Investment Company Institute general membership meeting last week. “The notion that a paid-off mortgage is the best retirement policy has been diminished—if not disproven.”
There are also some glaring realities that extend beyond being caught shorthanded when it comes to retirement savings. The cost of health care is skyrocketing. “Baby boomers have to worry about their own health but, in many cases, their parents’ as well,” Murphy says. On the flip side, he notes, “the cost of higher education continues to rise as leading universities are charging up to $160,000 in tuition and fees over four years.”
Merrill’s survey, however, found that respondents had a different spin on working in retirement. The two leading reasons for working past retirement age were to stay sharp mentally and physically, and to try their hand at a new profession.
Whatever the reasons, there’s still the question of getting the job, and that’s far from guaranteed. “While the new retirement is on most company radar screens, the challenges that it brings have not been adequately addressed,” the study says.
The study, conducted by Harris Interactive, was based on Web interviews with more than 5,000 people ages 25 to 70, as well as telephone interviews with executives in more than 1,000 companies.