New York Estate Planning & Elder Law Blog
Recent research shows that employees still working in Generation X do not have the overwhelming desire to retire. According to a new study released by Ameriprise Financial, an overwhelming 73% of people from Generation X plan on working in some capacity after they retire. However, interestingly enough the reason is not for financial purposes but for finding fulfillment.
Results of the Study
Called the “Retirement 2.0” study, the researchers at Ameriprise Financial found out some interesting qualities about the Generation X workforce. The vice president in charge of the research said that “they don’t have an on-off switch in terms of leaving the work force and instead anticipate a gradual evolution into this new phase of life, which really sets this generation apart.”
The study looked at over 1,500 Americans between the ages of 35 and fifty years old that have at least $100,000 in investable assets. The vast majority of participants, around ninety percent, stated that they intend on working in a different capacity after retirement such as part-time work.
Furthermore, over one-quarter of the participants, 27%, said that they could see themselves shifting into consulting work after retirement and nine percent told the researchers that they plan on working in a seasonal capacity. A total of 36% of Generation X workers said that they would prefer to work from their homes or in their own business.
Looking for Fulfillment
One of the most interesting aspects of the “Retirement 2.0” study is that the reasons behind Generation X people returning to work after retirement is not for financial gain. Rather, the driving force behind this decision is for mental and social interaction as well as a sense of fulfillment. Half of the participants stated that they want to work in a position that is less stressful, one-third said that they wanted a rewarding job, one-quarter want to do something socially meaningful, and almost twenty percent want a job that is more interesting.
Part of the shift is that Generation X workers started saving for retirement at a young age, with the average age being 26 years old. A total of 76% of participants in the study reported proactively planning for their retirement, with almost eighty percent saving in a 401(k) and seventy percent investing in an IRA or similar account. This is mainly because these investment vehicles are expected to be the primary source of retirement income, with Social Security and pensions serving only as supplementary income resources.
Confident in Retirement Goals
Over three-quarters of the participants, 77%, reported that they have saved enough to afford the lifestyle that they want in retirement. Furthermore, 64% are investing to make extra income during their retirement years. Only a single percent of participants had not given any thought to retirement, and about one-fifth had not started to significantly plan at this time. “They are setting aside money and investing now, while time is still on their side and they’re entering their peak earning years.”