More Americans Expect to Delay Retirement to Age 63
Nov 29, 2023
Those who don’t have
any financial plan in place plan to delay a full five years more, finds Empower
Today’s inflationary environment is causing some to rethink their
retirement plans down the line.
The latest research from Empower finds that considering the
current economic environment, more people estimate delaying their expected
retirement by three years, for an average age of 63. This number drops a full
five years further for those without a financial plan whatsoever.
Gen Z workers plan to retire the earliest out of all respondents,
at age 54. However, this is still five years older than their initial plan of
retiring by 49.
Respondents say that economic pressures including inflation (81%),
rising costs (81%), interest rates (66%), and student loans (32%) are
contributing to their fears, especially as 54% are currently carrying debt
while 36% cannot handle an unforeseen expense over $500 without any real worry.
As a result, 67% of Americans say their income isn’t keeping up
with inflation, and 42% say their standard of living is declining. It’s
probably why three in four Americans are more content and satisfied at work
(68%) and with their relationships (72%) than with their overall wealth.
Can money buy
happiness?
It’s a question asked time and time again, and now participants
have an answer: Yes, it can. Six in 10 Americans, including 72% of Millennials
and 67% of Gen Z respondents, say money could buy their happiness, with a
specific price tag of $1.2 million.
Furthermore, the average words that come into mind when thinking
about financial happiness include freedom, security, and relief.
Seven in 10 respondents say money would solve most of their
problems, and for 32%, even a gain of $15,000 would make a meaningful impact in
their lives. Forty-two percent say a $25,000 increase would be significant,
while 17% say $5,000 would be a big financial help.
Financial freedom and independence are linked to this happiness,
finds Empower, with a majority who believe they’ll feel secure when they don’t
have to rely on anyone else financially (87%), can withstand financial needs
(87%), or are able to financially take care of loved ones (84%).
Security in advice
The findings go back to the idea that having a financial plan can
significantly improve wellbeing, as those with a detailed financial roadmap
were about three time as likely to report greater happiness, including goal
setting, net worth, and financial allies.
It’s why more are looking to their employers for help, and especially
when it considers their retirement: 37% say saving for retirement is a top goal
for the year ahead and 67% believe their employer has a responsibility to help
with financial planning, especially for retirement with 401(k) options. Three
in four workers also say they would like to receive financial coaching to
decrease financial stress.
However, 43% feel that access to advice is beyond their reach, and
57% say they wished they had gotten financial advice sooner.
Source: 401k Specialist