Has the U.S. become the work forever society? According to a recent survey by Northwestern Mutual, a majority of Americans said they plan to work into their 60s and 70s, and some even into their 80s. Yet at the same time they indicate they intend to work longer, Americans are also unsure of their financial preparedness to actually fund their advanced lifespans.
Those findings came to light in Northwestern’s “2013 Planning & Progress Study,” which it conducted with Harris Interactive. About 1,500 Americans from age 25 and up were polled in an online survey in January.
According to the responses, only 6 percent expect to retire before the age of 60, while 52 percent expect to retire in their 60s and 32 percent in their 70s. Some 10 percent envision working into their 80s.
However, when asked about their financial preparedness, based on their current situation, future prospects and long-term plans, 56 percent said they are prepared to live to the age of 75; 44 percent to 85; and 35 percent to 95.
Those numbers stand in stark contrast to actual data that reveals that there’s a 50 percent chance a 65-year-old man today will live beyond age 87 and that a 65-year-old woman will live beyond age 90. If a couple, there’s a 50 percent chance that one spouse will live to age 94 and older.
Meanwhile, on average, pre-retirees said they will retire at 68, even though the mean age of retirement among those already retired is 59.
“The incredible contrast between how long people expect to work, and how financially prepared they feel to live long lives, dramatically underscores how far behind people feel in their financial planning,” said Greg Oberland, Northwestern Mutual executive vice president, in a statement. “We’re seeing the average retirement age being pushed further out, due in large part to widespread feelings of long-term financial insecurity.”
About half (51 percent) said they are less financially secure than they thought they would be at this point in their lives. Less than half – 43 percent – responded that they feel financially secure at the present time, while 32 percent do not, and the remaining quarter fell in the middle between not feeling strongly secure or insecure.
“Financial security” was defined as “a feeling of confidence that you will achieve the financial goals you have for yourself or your family through the actions you are currently taking.”
Despite those rather pessimistic statistics, Oberland said there are some positive signs: People are saying they intend to save more and “are aiming for slow-and-steady growth rather than swinging for the fences.”
Some subgroups expressed even less optimism for their financial future, specifically, singles and those with younger children. The breakdown is as follows:
- Sixty-two percent of single Americans say they’re less secure than they thought they’d be by now, compared to 43 percent of married people.
- Those with children under 18 are less financially secure now (56 percent) compared to where they thought they’d be, whereas those with older children (49 percent) or no children (49 percent) feel slightly more secure.
- Gen Y (59 percent) and Gen X (63 percent) are less secure now than they thought they’d be, but the Mature Generation (36 percent) is more likely to say they are just where they thought they’d be or are more secure than they thought they’d be.