A new survey by Allianz Life Insurance Company of North America suggests a majority of Americans approaching retirement age are expecting to work beyond their traditional retirement age.
Working Beyond Retirement Age: According to Allianz's 2022 Retirement Risk Readiness Study, 59% of Americans within 10 years of retirement are planning to work beyond their current Social Security retirement age. This percentage is a significant uptick from the 11% of current retirees who reported working beyond their retirement age.
Related Link: Is The US Entering A Millennial Baby Boom?
The survey also found that only one-third (33%) of near-retirees plan to take Social Security benefits before their full retirement age, limiting their maximum benefit. These numbers suggest Americans may be overly optimistic about their ability to put off Social Security benefits given 49% of current retirees took their benefits earlier than full retirement age.
Millennials Preparing: Near-retirees also seem to have an overly optimistic view of the role Social Security will play in their retirement finances. In fact, 40% of Americans within 10 years of retirement expect to get enough from Social Security to meet their retirement needs.
In addition, 35% of Americans more than 10 years from retirement expect Social Security to cover their retirement budgets. In reality, only 10% of current retirees said Social Security alone provides enough retirement income.
The good news may be that many younger Americans appear to be better-prepared for retirement than previous generations. A recent study by Charles Schwab found millennials are doing relatively well in saving for retirement compared to Baby Boomers and Gen Xers at the same age. The same survey found 72% of millennials are significantly pessimistic about financial security in retirement compared to just 43% of Boomers at the same age.
Benzinga's Take: Millennials reportedly make up the majority of the U.S. workforce but represent just 6% of all U.S. household wealth, which may account for their relatively pessimistic view of retirement.
At the equivalent age, Boomers represented more than 20% of U.S. household wealth.
One of the best ways to get an early start on retirement preparation is to invest in a diversified S&P 500 index ETF, such as the SPDR S&P 500 ETF Trust SPY.
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