Retirement Living Information Center

April 2005

 

New Retirement Survey Shows Boomers Not Interested in Traditional Retirement Leisure

Merrill Lynch has released the findings of a new study that reveals how baby boomers envision their retirement and the coming decades of their lives. "The New Retirement Survey," conducted for Merrill Lynch by Harris Interactive in collaboration with Age Wave, reports that the majority of boomers plan to keep working and earning in retirement, but will do so by cycling between periods of work and leisure, thus creating a new model of retirement.

"Baby boomers fundamentally will reinvent retirement, says James P. Gorman, President of the Global Private Client Group, and this has profound implications for how we at Merrill Lynch need to advise this generation of clients -- individuals as well as retirement plan sponsors. With boomers living longer and remaining engaged and employed beyond age 65, many of the traditional financial assumptions regarding retirement need to be reexamined," he said.

This survey offers insight into the hopes, fears and motivations of this influential generation, as well as the coming impact on retirement, work, recreation, marriage, family, healthcare, housing, entitlements and the economy. Highlights of the survey include the following:

The new retirement "turning point." While 76% of boomers intend to keep working and earning in retirement, on average they expect to "retire" from their current job/career at around 64 and then launch into an entirely new job or career.

The "longevity bonus." Boomers will create a whole new life stage. Since Social Security established the "normal" retirement age at 65, life expectancy for a 65-year-old has increased by over seven years and continues to lengthen. As a result of living longer, this generation plans to be "younger" longer and work longer. Most boomers (65%) will stop working for pay and retire in the traditional sense at some point. However, that phase is more likely to begin in the late 60's, rather than at age 60 or 65.

Boomers reject a life of either full-time leisure or full-time work. When probed about their ideal work arrangement in retirement, the most common choice among boomers would be to repeatedly "cycle" between periods of work and leisure (42%), followed by part-time work (16%), start their own business (13%) and full-time work (6%). Only 17% hope to never work for pay again.

It's not about the money. While 37% of the boomer generation indicate that a continued income stream is a very important part of the reason they intend to keep working, 67% assert that continued mental stimulation and challenge is what will motivate them to stay in the game.

The "me" generation becomes the "we" generation. The "me" generation has grown up -- now with deep concerns for the well-being of their children, their parents and their communities. Boomers are now ten times more likely to "put others first" (43%) than "put themselves first" (4%).

The unpredictable cost of illness and healthcare. This is by far the boomers' biggest fear. They are three times more worried about a major illness (48%), their ability to pay for healthcare (53%) or winding up in a nursing home (48%), than about dying (17%).

Boomer women are better educated, more independent, are simultaneously juggling more work and family responsibilities and are more financially engaged than any generation in history. They are dreaming of retiring to Mars while boomer men hope to retire to Venus. Boomer men are looking forward to working less, relaxing more, and spending more time with their spouse. However, boomer women view the dual liberations of empty nesting and retirement as providing new opportunities for career development, community involvement and continued personal growth.

"The results of this visionary study provide an unprecedented preview into the future of this influential generation. While there are some problem areas, it appears that boomer men and women are generally optimistic, innovative and hopeful - and they're definitely gearing up for a new model of retirement," said Ken Dychtwald, co-author of the survey and president of Age Wave. "We asked boomers for their hopes, fears and thoughts about retirement and what we got was the systematic dismantling of all of our preconceptions about the future, for not only this generation, but for nearly all of society's institutions."