Second in a series of articles on the UBS/优蜜传媒retirement study
Retirement is the ultimate goal for many American workers -- some point in the future when they don't have to face commuter gridlock, timecards, or demanding bosses, and have unlimited time to play golf, work in the garden, or do whatever else tickles their fancy. That may be the ideal, but what do future retirees really expect, and what do current retirees says it's really like? A UBS/优蜜传媒survey of non-retired and retired American investors* sought to find out.
In each of the three UBS/优蜜传媒retirement studies conducted over the past six years, a majority of non-retired investors appear to be eagerly anticipating their retirement years. This year, 56% of non-retired investors said that they are looking forward to their retirement; that percentage was about the same in 1998 and 2002. On the other hand, about a third of non-retired investors in each administration of the survey said they have not given much thought to their retirement.
In the 2004 survey, currently retired investors were also asked whether they looked forward to retirement when they were still working. Sixty-three percent of retirees said they looked forward to retirement, 32% said they hadn't given it much thought, and 5% said they didn't look forward to retirement.
Not surprisingly, non-retired investors aged 50 and older have given more thought to retirement than have their younger counterparts. Interestingly though, while similar percentages of investors from all measured age categories look forward to retirement, investors in the 50 and older age group are slightly more likely to say they are not looking forward to being retired. Although even among this group, only 9% say they are not looking forward to retirement.
The 2004 survey reveals that more non-retired investors are planning to work longer today than was the case a few years ago. More than half of non-retired investors (57%) say they are planning to retire when they are older than 62. That percentage has steadily increased over the past two studies -- 47% of investors in 2002 and 36% of investors in 1998 planned to retire after age 62. Changes in Social Security benefit age requirements may account for the change. Beginning in 2000, the age for collecting full retirement benefits increased to age 65 or 67 depending on the retiree's date of birth.
The survey also asked non-retired investors about the biggest problems they expect to face after retirement, and asked current retirees what problems they are facing. Healthcare insurance -- an issue that receives extensive coverage in the media -- is more of a worry for future retirees than for current retirees. While 44% of non-retired investors cite healthcare coverage as a major problem they expect to face, retirees are seemingly less anxious, with only 15% categorizing this as a major problem for them.
Non-retired investors are also more worried about their financial status after retirement than retired investors are. Seventeen percent of non-retired investors anticipate this as a problem, while only 6% of retired investors say it is a current problem for them.
Bottom Line
It is comforting to note that retired investors are less concerned than non-retired investors about their healthcare coverage and financial status in retirement. But there may be a good reason why these issues loom larger for future retirees than current retirees. Given the stress that retiring baby boomers will place on the Social Security system, the rising cost of healthcare and the fact that employers have been cutting back on health benefits to retired employees, non-retired investors who worry about healthcare coverage in their retired years may only be realistic.
*The special retirement survey is based on a telephone survey of a nationally representative sample of 612 investors who are not retired and of 412 investors who are retired. To be classified as an investor, one must have a minimum of $10,000 in investable assets. All interviewing was completed between July 29-Aug. 1, 2004. For results based on the sample of non-retired investors, the margin of error is ± 4 percentage points at the 95% confidence level. For results based on the sample of retired investors, the margin of error is ± 5 percentage points at the 95% confidence level.
