Study Indicates that Half of Older Americans May Unretire

Transcript of Podcast Episode 266

Hello this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode, a new study indicates that half of older Americans are considering either returning to the workforce or staying employed longer than they first planned.

The “FIRE” Movement, or Financial Independence, Retire Early, has gotten a lot of attention in the last few years. The basic idea is that through aggressive savings and investments, it is possible to begin your retirement in your 30s or 40s. It may be possible for some, but for most people, the sacrifices required make it very difficult to achieve.[1]

But how often do people end up regretting the decision to retire early? More often than many expect, it turns out. A recent study by F&G Annuities & Life, Inc. reveals that half of American retirees and pre-retirees are thinking about either delaying or coming out of retirement.[2]

According to the survey, the number one reason people may decide to “unretire” is financial worries about the future. No surprise there. But there are other reasons that are nearly as important. 29 percent say they want to stay in the workforce simply because they enjoy what they do. And 27 percent say they enjoy the challenge and intellectual stimulation their job provides.[3]

And Social Security provides little help if you retire early.  It is not available to workers until age 62 (60 if you’re a surviving spouse), and even then it’s only 70 percent of your full benefit, which for most people is available at age 67.  And keep in mind that when you do get Social Security, it is likely that it will replace less than half your pre-retirement income.

A similar issue appears when you look at retirement savings. Whatever you have, you’ll likely need to make it last for a very long time if you retire early. According to AARP, a male who retires at age 55 will have to stretch his savings for 25.1 years, rather than 17.8 if he starts at age 65. And for a married couple, if you make it to age 65, there’s a 25 percent that the surviving spouse will live to age 98.[4] Meanwhile, household expenses—property taxes, maintenance, condo fees—are not going away simply because you retire.

Only about half of the respondents to the F&G survey use the services of a financial advisor [5]. Chris Blunt, President & CEO of F&G, feels that a financial advisor can help provide peace of mind by giving people more confidence in their decisions.  “Leveraging the expertise of a trusted financial advisor can often make people more confident and better equipped to navigate the challenges of retirement planning with conviction and clarity,” he said. But there’s more. As Blunt says, “once financial considerations are mitigated, advisors could think beyond the numbers and also consider their role helping clients plan for overall happiness— whether that involves volunteering, working full time, part-time or not at all.”[5]

[1] Rodriguez, Andreina. “What is the FIRE movement and how does it work?” CNBC.com.  https://www.cnbc.com/select/what-is-the-fire-movement/  (accessed December 19, 2023)

[2] F&G Annuities & Life, Inc “Retirement Reconsidered: F&G Survey Reveals Half of Americans Are Pushing Back or Coming Out of Retirement.” PR Newswire.com. https://www.prnewswire.com/news-releases/retirement-reconsidered-fg-survey-reveals-half-of-americans-are-pushing-back-or-coming-out-of-retirement-301907292.html (accessed December 19, 2023)

[3] F&G Annuities & Life, Inc. “Retirement Reconsidered: F&G Survey Reveals Half of Americans Are Pushing Back or Coming Out of Retirement” FGLIfe.com. https://www.fglife.com/news/retirement-survey-2023  (accessed December 20, 2023)

[4] Waggoner, John. “10 Things No One Tells You About Early Retirement.” AARP.org. https://www.aarp.org/retirement/planning-for-retirement/info-2021/pre-early-retirement-reality-check.html (accessed December 22, 2023)

[5] F&G Annuities & Life, Inc. “Retirement Reconsidered: F&G Survey Reveals Half of Americans Are Pushing Back or Coming Out of Retirement” FGLIfe.com. https://www.fglife.com/news/retirement-survey-2023  (accessed December 20, 2023)

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