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economy,
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recessionThe July/August 2009 issue of DiversityInc magazine will feature generations in the workplace. Click here to subscribe to DiversityInc magazine.
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Americans across generations are developing new and different ideas about how they expect to approach retirement. A new study by Charles Schwab and Age Wave reveals that all generations are rethinking how to achieve financial security as an uncertain economy challenges preconceived notions about life after work.
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"We undertook this study to better understand the way people from four adult generations think about retirement," said Charles Schwab, founder, chairman and CEO of the Charles Schwab Corp., in a statement. "We surveyed nearly 4,000 people across the generations and got some fascinating insights that show people are rethinking the old model of retirement. We discovered, for example, that on average people believe 'old age' doesn't begin until 75 or older. With the average retirement age now in the early 60s, Americans are reasonably planning for upwards of 30 years in this stage of life. Most people are beginning to think of this as a whole new third act."
The Schwab study describes this thinking in detail:
A Distress Call From Retirement Limbo: Respondents are thinking about their retirement futures and say they will need to have saved at least $500,000 to live comfortably in retirement?which is twice the median net worth of today's boomer pre-retirees.
A Coming Era of Financial Self-Reliance: Looking forward, survey participants identify a need for self-reliance in retirement. Younger generations, especially, see larger parts of their retirement funds coming from personal savings and investments.
A Request for Better and More Financial Education From Schools and Employers: Three percent of all generations strongly agree that Americans are currently a financially responsible population. But survey participants say they want help to help themselves: 95 percent say basic financial management should be a standard part of high-school curriculum; and 7 in 10 would like professional saving and investing advice from their employer.
Looking Forward to a New Exciting Chapter Based on Reinvention and New Ways of Working: Staying mentally active?not the paycheck?is the No. 1 reason people want to work in retirement, and 60 percent say they would like to enter a different line of work.
This new thinking about retirement also shows that nearly half (45 percent) of survey participants see retirement as a time to give back to their family and community. This dynamic may be due in part to seeing a gap of potentially productive years between retirement age, which they define as 63, and "old age," which they say does not start until around 75. People who view retirement as a time to give back are more likely to believe they will stay youthful longer and that success is about having loving family and friends.
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