Many articles about retirement in the WSJ don’t resonate because the retirees tend to have careers like being a CFO of a small company or some kind of consultant. This article is interesting because it has plenty of actual data from a 34-year survey by the Employee Benefit Research Institute.
Some 28% of workers said they expected to retire at age 65, up from 23% a year ago. This was the median answer to the question for workers and remains the default age of retirement in the popular imagination. The median actual age of retirement has been 62 for several years, the survey found—which is the earliest retirees can claim Social Security benefits.
Most people are so far from retirement, they only need a vague target. Like the article says, 65 is the default answer. If 65 is running the full race, then for many people, that is the max. If something comes up a few years short of that, they drop out early. There are still many public sector jobs that don’t require a person to hit 65 to get a full pension. Many private sector jobs don’t offer a pension, but a 401k plan. In that scenario, there isn’t anything magical about hitting 65. A person goes when they can afford to go.
Workers are chronically overly optimistic about how long they can remain on the job, said Craig Copeland, director of wealth-benefits research at EBRI. That raises the stakes of how much they need to save.
Copeland is missing the point. Most workers don’t want to stay on the job. It is just as fair to say that most workers are overly pessimistic about when they can afford to retire.
People also imagine they will continue to work more after retirement than they actually do. While 75% expect to work for pay in some capacity in retirement, only 30% of retirees said they have actually done so, the survey found.
People don’t really know what retirement is like until they retire. Really, until they’ve been retired for 6 months or so. While working, it feels lazy and decadent to say you won’t work at all in retirement. Also, many people feel like they will be bored, feel useless or can’t fill their days.
I am starting to feel like retired people inhabit a plane of existence coincident with working people. We are like ghosts. Until you are a ghost, you don’t know how many other ghosts there are around us all the time. Once you see the other ghosts, you learn that different rules apply.
Nearly 70% say their lifestyle is the same or even better than what they envisioned.
Did you notice how the numbers match up? Retirement life is worse than envisioned for 30% and 30% of retirees still work in some capacity. How many are the same people?
Though retirees continue to worry about money, and over half of those surveyed said their overall spending is higher than anticipated, the vast majority still report they are free to spend what they want, within reason.
Seriously, what’s not to like about retirement?