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Retirement Only a Breather: 7 Million Go Back to Work, Putnam Study Says; Most Return by Choice; But Large Gap Separates ''Wanted To's'' and ''Had To's''Posted by Randy on: 2005-12-19 13:37:18 in category:
Retirement Headlines [ Print | Permalink / 0 Comment(s) ] Retirement Only a Breather: 7 Million Go Back to Work, Putnam Study Says; Most Return by Choice; But Large Gap Separates ''Wanted To's'' and ''Had To's'' BOSTON--(BUSINESS WIRE)--Dec. 8, 2005--The largest, most comprehensive study of Americans who retired and then returned to work reveals major changes in traditional retirement patterns. According to research released today and sponsored by Putnam Investments, about 7 million previously retired Americans have returned to work for pay after an average sabbatical of one-and-a-half years. Most are in a job requiring at least the same skill and experience levels as their prior position. "Our study shows retirement in the United States has already moved far beyond ending work at age 65, gold watches, and early-bird specials," said William T. Connolly, Head of Retail Management at Putnam Investments. "For many, retirement is just a planned pause before resuming a career. These 'working retired' are, by our estimate, now almost one-third of all American retirees." The Putnam-sponsored study, "The Working Retired," offers a fascinating view of workers who have reentered the workforce. It also highlights vivid economic and emotional contrasts within this population. Putnam's research was based on a national survey of 1,726 retirees who are working; they have an average age of 61. The Working Retired: Well Educated, High Income, but They Don't Own Their Homes The working retired represent 10% of the U.S. workforce age 40 or over. Of the respondents to the Putnam survey, most (54%) work part time, 36% work full time, and the remaining 10% are looking for work. Two-thirds said they planned to return to work following their first retirement. In aggregate, the working retired are an educated and high-income group. The average household income of survey respondents, $87,000, is 60% higher than that of traditional non-working retirees, and the working retired are about twice as likely to have a college degree. Surprisingly, over half (60%) still carry a mortgage, a large percentage for people in their sixties and even seventies. Further, their home equity is relatively low. As a group, on average, these working retired own only 47% of their homes. The working retired who participated in the survey have, on average, investable assets of about $400,000, and 70% wish they'd started saving more and sooner. But they're saving now. More than three-quarters save at least part of their income, and as a group save an average of 11% of their total household income. "The working retired see retirement as an opportunity for growth and fulfillment and pursue these goals in large part through continued employment," said David Tyrie, Director of Retirement Services at Putnam Investments. "There's no indication when the working retired plan to slow down their working, saving or spending. Their retirement investing needs will be different from any group that has come before them. Our industry must recalibrate its planning assumptions for advising these investors, as well as the 75 million Boomers that come after them." Over the next two decades, a record number of Americans will become eligible to retire. Putnam's study may offer a preview of life for these Baby Boomers, who will begin turning 65 in 2011. Two Groups A closer look at the working retired population reveals a dichotomy: two-thirds of working retired survey respondents returned to the workforce because they "wanted to," but the remaining one-third went back out of economic necessity. They "had to." Average household investable assets for these "wanted to" workers are almost $550,000, compared to average investable assets of $140,000 for the "had to" worker. A large group of these "wanted to" workers went back to work expecting non-financial rewards. Close to half thought working might make them healthier and more energetic, and they also saw it as a way to keep themselves in top mental form. These were motivations of less than one-third of those working from necessity. Forty percent of the "wanted to" workers, compared to only 16% of the "had to" workers, thought working might be "fun." Satisfaction levels are significantly different too. Fifty-six percent of working retired who went back to work by choice say they are very satisfied with retirement, compared to only 16% who went to work out of necessity. "Our study reveals an important message for today's workers," Mr. Tyrie said. "A significant subset of working retirees today are forced to return to the workforce because of inadequate saving and investing. Working in their seventies to pay bills is not the portrait of retirement most Americans envision." Need for Professional Financial Advice Less than half (46%) of the entire group of working retired surveyed have a professional financial advisor. Those with an advisor have average assets of $621,000, more than 50% higher than the total group's, and they say they're more comfortable with being on track financially. Further, just 25% of these working retired have a formal financial plan. Of those who do, their most pressing objectives are maximizing income and preserving wealth. "There's a clear need for financial advisors among the working retired," noted Putnam's Mr. Connolly. "As we've seen in our prior studies, people using advisors are more satisfied with their financial progress and are more financially secure." About the Study "The Working Retired" study was conducted online by Brightwork Partners in August 2005 for Putnam Investments. Results are based on interviews with 1,726 respondents who retired from full-time employment and returned to work. The error rate for the figures cited is plus or minus 2%. The study's copyright is held by Putnam Investments. Brightwork Partners LLC is a research-based consultancy focusing on retirement issues. Visit www.brightworkpartners.com. The estimate of the number of people who have returned to work following retirement was developed by screening random samples of employed Americans age 40 or over by whether or not they have ever retired. Approximately 10% have. Projected against a base of approximately 70 million employed civilians age 40 or over as measured by the Bureau of Labor Statistics, this proportion equates to approximately 7 million people. Some figures in this press release have been rounded. About Putnam Founded in 1937, Putnam Investments is one of the nation's oldest and largest money management firms. As of November 30, 2005, Putnam managed $190 billion in assets, of which $128 billion is for mutual fund investors and $62 billion is for institutional accounts. Putnam has headquarters in Boston and offices in London and Tokyo. For more information, go to www.putnaminvestments.com. Contacts Putnam Investments Sinead Martin, 617-760-8515 sinead_martin@putnam.com or TowersGroup Scott Sunshine, 212-354-5020 scottsunshine@towerspr.com Open community website http://www.business-business.biz http://www.investment-investment.us http://www.retirement-retirement.com Recommended sites Open community website http://www.business-business.biz http://www.investment-investment.us http://www.retirement-retirement.com Recommended sites To design your custom retirement plan. http://www.retirement-plan.us For planning an IRA rollover this is the site to review. http://www.ira-rollover.us For professional asset allocation and the wonders it can do. http://www.asset-allocation.us Managers selected to fit your needs. http://www.money-managers.us |
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