Sunday, August 28, 2005

Off Putting?

Last week Fidelity Investments put out the results of a “survey” about people’s attitudes toward saving and retirement (see One Third of Workers Delaying Retirement). The headline – basically that a third of respondents were putting off retirement – was no big surprise. It is perhaps a sign of the times that people, particularly those nearing retirement, now speak with disarming regularity about their intention to stay in the workforce beyond the ages typically associated with “retiring.” Certainly, a growing number of us (including those on both sides of this newsletter) toil at professions that can, from a physical standpoint anyway, be pursued just as well at 70 or 75 as they can at 55 (whether we will be permitted to do so is another subject altogether).

Nor were the reasons for pushing back retirement earth-shattering; more than half (55%) said it was because they hadn’t saved enough, while roughly a third said they were planning to do so to maintain their employer-sponsored health coverage, and another third said they started saving too late (which no doubt includes some of those who hadn’t saved enough, since the totals add to more than 100%).

No, what struck me as “odd” was the fact that there were workers in the 25-40 age bracket who were also already talking about pushing back retirement. Now, their reasons were different – being more inclined to cite the financial burden of paying for a child’s college expenses than the “poor investment choices” and “market fluctuations” of their workplace seniors as a contributing factor, for example.

Now, these kinds of surveys are notoriously bad predictors of future events – after all, some of those 25-year-olds probably don’t even HAVE kids yet. Moreover, we have no way to know that, save for an interviewer’s query, whether thoughts of retirement had ever actually previously flitted across their mental radar screens, or if they had given it any more thought than a five-second response to a direct question.

Still, whatever their focus or reasons, I find the notion that those at that stage of their work cycle are, even for a moment, contemplating that eventuality encouraging – and the notion that they are already considering having to postpone it, disheartening.

- Nevin Adams


  1. I had exactly the same reaction: 25 year olds! -- what possible idea do they have about when they're going to retire? Unless they dreamed of retiring by 40, and now after working a few years realize that's not going to happen.

    A similar, though less pointed, remark could be made about most people more than 10-15 years from retirement. How many people have a plan (not just a dream) calculating that they'll be able to retire by date 20XX, when XX > 20? I figure I can retire in 5 years, but am not really sure, and I have pretty detailed plans and calculations. What if the dollar drops 40% -- what will that do to my plan? I have no idea.

  2. I doubt that many have that kind of plan...just a date, and a lot of hope...