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Baby Boomers: Trailblazers of the New Retirement

The generation that has rewritten societal rules at every stage of their life now looks to be redefining retirement as well.

That, according to a new report, is by planning to work until an older age than previous generations: Two-thirds plan to or already are working past age 65 or do not plan to retire at all – and many expect to continue working in retirement, at least on a part-time basis, according to the survey by the Transamerica Center for Retirement Studies. Not that it’s necessarily positive; most of those who plan to continue working say it’s due to income or health benefits.

Worse, Baby Boomers’ vision of a flexible transition into retirement may prove difficult since many employers do not have business practices in place to accommodate a flexible transition into retirement.

Retirement Resources

Most Baby Boomers (87%) are expecting Social Security to be a source of their retirement income, and a third (34%) expect it to be their primary source of income. A comparable number (33%) are expecting income from a traditional pension plan, while most (78%) are looking to 401(k)s, 403(b)s, IRAs and other savings and investments.

The current household savings in all retirement accounts among Baby Boomer workers is $147,000 (estimated median), though the report cautions that many Baby Boomers were already mid-career when 401(k) plans were first introduced, and have therefore not had a full 40-year time horizon to save in 401(k) plans.

The survey asked what steps they are taking to help ensure they can continue working: 67% say they are staying healthy, 56% are performing well at their current job and 40% say they are keeping job skills up to date. Nearly 4 out of 10 Millennials plan to work in retirement for enjoyment.

What if it doesn’t work out as planned? Only 25% of Baby Boomer workers have a backup plan for retirement income if forced into retirement sooner than expected.

Expectations Adjustments

In 2016, 62% of workers are confident that they will be able to fully retire with a comfortable lifestyle, including 15% who are “very confident” and 47% who are “somewhat confident.” Millennials (68%) and Baby Boomers (62%) share higher levels of retirement confidence, while Generation X (56%) is the least confident. However, across generations, relatively few Boomers are “very confident” (compared to 18% of Millennials and a mere 12% of Gen Xers). Generation X and Baby Boomers are planning to live to age 85 (median), with only 13% planning to live to 100 or older.

More Baby Boomers (45%) expect their standard of living to decrease compared with Generation X (41%) and Millennials (36%). In fact, a third of Millennials expect their standard of living to increase when they retire, compared to just 7% of Baby Boomers.

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