Friday, October 31, 2014
We have blogged on a number of occasions about whether some folks will be able to afford to retire, or have to delay retirement. A new report, Which Employees are Delaying Retirement and Why? was released by Towers Watson in September 2014. The report notes a certain “type” who is delaying retirement: less healthy, highly stressed and disengaged from their jobs” with financial necessity as the catalyst for delay. Interestingly, the report notes the type of plan also affects the timing of retirement, with “defined benefit (DB) plan participants retiring earlier than employees with only defined contribution (DC) plans, even where counter influences exist.” The report ties together some interesting trends and notes that delayed retirement isn’t just a passing fad
The number of workers planning to delay retirement is growing. Expected retirement delays are reflected in changes to workers’ planned retirement ages and/or retirement dates. In 2009, just over one-third of full-time employees planned to postpone retirement versus 43% in 2013, a nine percentage point jump … Conversely, a smaller group (12%) is planning to retire earlier — up from 5% in 2011. Perhaps the recent uptick in equity markets has improved affordability prospects for some…. Nearly three-quarters of those delaying retirement are planning a delay of three or more years … As a result, expected retirement ages are rising.
The article discusses the correlation between saving, the type of retirement plan and retirement timing and provides a profile of those delaying retirement. Charts that accompany the report provide great graphical information. A pdf of the report is available here