Financial Literacy - Retirement income planning
Americans plan to work through retirement

Forget about a leisurely retirement of golfing and cruising around the world. The retirement of tomorrow will be all about working.

At least that's what three-quarters of American workers expect, according to Bankrate's most recent Financial Literacy poll. Bankrate commissioned Princeton Survey Research Associates International to ask both retirees and workers questions about retirement realities and expectations.

As depressing as the thought of working in perpetuity may be to the lazier workers among us, work is a powerful factor in our identity and well-being. So of the 75 percent who expect to work for as long as they can, 39 percent say it's because they like to work. One-third (32 percent) say it's because they'll need the money. A few say they'll work for both reasons.

Interestingly, only 15 percent of today's retirees actually work to supplement their income.

Radon Stancil, a Certified Financial Planner at Diversified Estate Services in Raleigh, N.C., says workers' expectations may not jibe with reality.

Which option best describes your plans to work during retirement?
"I don't know if that is just youth talking and not feeling what it's like to be 65 or 70 and having to work," he says.

"Also, it's much more difficult for people who are already retired to actually go back to work. For instance, if you retired when you were 62 or 65 but the downturn created a situation where you feel like you need to go back to work, the problem is: What do you do for work?"

Education a factor

Working forever might be the only option for Americans if the situation of many current retirees is any indication.

One-quarter (26 percent) of retirees depend on Social Security as their only source of income.

Education plays a role in how much money retirees have. Among those with a high school education or less, 37 percent have no other income sources than Social Security. Meanwhile, just 6 percent of retirees with a college degree or higher rely solely on Social Security.

Unfortunately, young people are not entirely on board with saving for retirement. Almost 30 percent of Americans surveyed between the ages of 18 and 29 report that they do not invest in a retirement plan.

"Young people need to get educated on savings or they're going to be part of the 26 percent living on Social Security. The more educated people are, the more likely it will be that they are not going to be dependent on Social Security," says Mark LaSpisa, a Certified Financial Planner at Vermillion Financial Advisors in South Barrington, Ill.

Worry in retirement

The majority of today's retirees worry about money, a situation compounded by the volatility in the stock market. More than half (55 percent) worry about it and wish they'd saved more. Thirty-eight percent say they've saved enough and don't worry a whit.

Do you worry about money and wish you saved more, or did you save enough?
But worry is a transient problem, says LaSpisa. "Worry is relative to what is going on currently," he says.

And the market movements over the last year have been rough for people counting on their retirement portfolios for the next 10, 20 or 30 years.

"There are two big fears. One is that they're going to get sick in retirement and lose their assets paying for medical or long-term care stay. The second is that they will stay very healthy and outlive their money," says LaSpisa.

Nearly four out of 10 (37 percent) retirees say they fear outliving their money. But six out of 10 (59 percent) aren't all that concerned.

Even the biggest worriers may just shrug when it comes to worrying about possibilities that far down the line. "People are typically more concerned about the fear facing them now rather than the fear facing them 15 or 20 years down the road," says LaSpisa.

More women than men worry, however: 44 percent of women versus 28 percent of men.

This might be due to male bravado or the fact that statistically it's likely to be the women who stick around the longest, says Conrad Ciccotello, director of the personal financial planning program at Georgia State University's Robinson College of Business.


"Demographically 12 out of 13 widowed people are women. While this confident man might be sure everything is going to work out, 12 times out of 13 he dies first. So you're left with the woman saying, 'Well, what do I do?'" he says.

Stancil expressed surprise that more people aren't worried about running out of money in general.

"The majority of people we talk to, that is the No. 1 thing to worry about. And it doesn't matter the size of assets. They could have $5 million saved up and everything paid for and living on $40,000 a year, and they're still worried about running out of money," he says.

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