The baby boomer generation is not interested in pursing a traditional retirement of leisure but instead continue to work and earn, according...
The baby boomer generation is not interested in pursing a traditional retirement of leisure but instead continue to work and earn, according to a new study by Merrill Lynch.
“The New Retirement Survey”, which was conducted in association with the polling company Harris Interactive and think tank Age Wave, found that as many as 76 per cent of boomers in the US intend to keep working in their retirement.
“Baby boomers fundamentally will reinvent retirement, and this has profound implications for how we at Merrill Lynch need to advise this generation of clients — individuals as well as retirement plan sponsors,” said James Gorman, president of the Global Private Client Group at Merrill.
“With boomers living longer and remaining engaged and employed beyond age 65, many of the traditional financial assumptions regarding retirement need to be reexamined. This survey provides a useful starting point.”
The report added that boomers will take advantage of their “longevity bonus” and create a whole new life stage. Since Social Security established the "normal" retirement age at 65, life expectancy for a 65-year-old has increased by over seven years and continues to lengthen.
As a result of living longer, this generation plans to be "younger" longer and work longer. Most boomers (65 per cent) will stop working for pay and retire in the traditional sense at some point. However, that phase is more likely to begin in the late 60's, than at age 60 or 65.
Boomers are rejecting a life of either full-time leisure or full-time work, according to the study. When probed about their ideal work arrangement in retirement, the most common choice among boomers would be to repeatedly "cycle" between periods of work and leisure (42 per cent), followed by part-time work (16 per cent), start their own business (13 per cent) and full-time work (6 per cent). Only 17 per cent hope to never work for pay again.
Money will be less important to the boomer generation in retirement, said the report. While 37 per cent of the boomer generation indicate that continued earnings is a very important part of the reason they intend to keep working, 67 per cent assert that continued mental stimulation and challenge is what will motivate them to stay in the game.
And there will, according to the study, be a transformation of the "me" generation into the "we" generation. The "me" generation has grown up — now with deep concerns for the well-being of their children, their parents and their communities. Boomers are now 10 times more likely to "put others first" (43 per cent) than "put themselves first" (4 per cent).
“The results of this visionary study provide an unprecedented preview into the future of this influential generation. While there are some problem areas, it appears that boomer men and women are generally optimistic, innovative and hopeful — and they're definitely gearing up for a new model of retirement,” said Ken Dychtwald, co-author of the survey and president of Age Wave.
He added: “We asked boomers for their hopes, fears and thoughts about retirement and what we got was the systematic dismantling of all of our preconceptions about the future, for not only this generation, but for nearly all of society's institutions.”