Recession has taught us to be more realistic about retirement

by Jim Sloan

A lot has been written in recent years about how the recession dashed many people's dreams for retirement, forcing many of us to delay retirement and to dramatically scale back our expectations.

The prevailing sense has been that this is a bad thing.

But now comes a new study that suggests that perhaps the baby boomer generation, which is just now approaching retirement with less in their savings accounts and investments than they expected, is redefining retirement--as a promising undertaking rather than as a period of winding down.

Looking on the sunny side

According to the SunAmerica Retirement Re-Set Study, which has been conducted annually for the last 10 years, Americans--despite the financial body blows delivered by the recession--remain optimistic. Among the findings:

  • Three out of five of those 55 and older are hopeful about the future. We have re-set our idea of an ideal retirement and we're looking forward to it.
  • 81 percent of us have learned from the recession about the importance of retirement savings accounts and investments, and as a result we intend to work longer, save more and reduce our spending.
  • 54 percent of those 55 and older view retirement as a new chapter in their life story, not the epilogue. That's up from 38 percent from 10 years ago.
  • Those on the verge of retirement plan to delay retirement from the age of 64 to 69, partly because their savings rates haven't been high enough but also because they know they will be living longer.
  • Two thirds plan to include some work in their retirement as a way of staying active and involved.

Caring for family members

That is not to say that baby boomers and other pre-retirees aren't foreseeing some challenges as they age.

Although 82 percent said their chief financial goal is no longer wealth but peace of mind, about half of them also expect to be supporting other family members, from aging parents to adult children. Prior to the recession, 62 percent of people older than 55 felt financially secure, but now only 44 percent feel that way.

Concerns remain, of course. While 28 percent of these pre-retirees were worried about their savings rates prior to the recession, now nearly 40 percent are worried.

Time for work and play

The new picture of retirement that is emerging is one in which retirees bounce between periods of work and periods of leisure. The work, they say, will be more for "stimulation and satisfaction" than for financial need.

That said, the study found that 76 percent of those surveyed received a financial wake-up call in the last few years and 84 percent admit they exercise more caution with their investments. Two out of three say they want investments--such as a certificate of deposit or money market accounts--that are guaranteed not to lose value.

Four out of five people surveyed said they want advice on the best retirement savings accounts and vestments at their workplace, and more than 90 percent said financial management should be part of the high school curriculum.

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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