Many employees plan to continue working past retirement age, survey finds

by Jim Sloan

A shrinking number of American workers are confident of being able to live comfortably in retirement, and many say they now plan to continue working into their 70s.

That's the findings of a new survey from the Transamerica Center for Retirement Studies in Los Angeles, which surveyed more than 4,000 workers employed at for-profit companies with 10 employees or more.

The survey found that nearly 40 percent of the workers plan to work long past normal retirement age, an increase from the 28 percent who said that in 2010, and many say they won't retire at all. Those workers blame the recession for their circumstances.

Why they need jobs

More than half of the workers said they'll continue to work after retirement, mostly because they don't think they have enough in their savings accounts to be able to afford a full retirement. Some said they'll work because they need the health benefits.

The sobering survey results comes on the heels of a recent study that showed the average 401(k) savings accounts in the U.S. has climbed to nearly $75,000, up from $71,5000 at the end of 2010, the highest amount recorded since 1998. That analysis from Fidelity found that 401(k) savings accounts investments have grown 58 percent since 2009.

But even as 401(k) investments have grown, the percentage of workers confident they'll enjoy a comfortable retirement has fallen from 59 percent in 2007 to 51 percent this year.

People aren't saving enough

Part of the problem might be a statistic noted by Pensions & Investments magazine, which reported that only 78 percent of the employees in the survey were participating in a defined contribution plan when their employer offered them one. The survey founded that 25 percent of the respondents did not have access to workplace savings accounts of any kind.

The survey revealed a big gap between what retirees feel they'll need in retirement and what they've saved in their investments. The median amount workers said they needed in their savings account, money market account, 401(k) or IRA was $600,000, but only 30 percent said they have more than $100,000 in their retirement savings accounts. Nearly 90 percent felt they weren't putting away enough money--be it in a retirement account, savings account or money market account. You can compare interest rates for money market accounts and savings accounts online.

Staying on the job: a good thing?

Transamerica officials both praised and lamented the fact that so many Americans intend to continue working. Working until the age of 75 instead of retiring at 65 gives you 10 additional years to sock away money into a retirement savings account and 10 fewer years of retirement to save for. And the longer you wait to retire, the higher your monthly Social Security benefits will be.

But at the same time, "planning not to retire is not a retirement strategy," Collinson said, noting that nearly 90 percent of those who plan to keep working don't have a backup plan if they lose their jobs or their health declines and they can't work. Many people in their 70s find they have to stay home to care for a sick spouse.

Disclaimer:This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

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