Retirement-wise, 80 may be the new 65 when it comes to the age Americans expect to stop working and have enough saved up.
A majority (74 percent) of surveyed middle-class Americans said they will likely work well into their “retirement years,” according to the seventh annual Retirement Survey by Wells Fargo.
Of those, 39 percent said they would need to work to make ends meet or maintain their lifestyles, while 35 percent said they would work because they want to, rather than out of financial need.
A quarter of respondents said they will “need to work until at least age 80” to live comfortably in retirement.
“The fact that the vast majority of middle class Americans expect to work well past the traditional retirement age has significant societal and economic implications,” said Joe Ready, director of Wells Fargo Institutional Retirement and Trust. “Will people be physically and mentally able to work later in life? What will it mean for young people entering the workforce? And, how does our system of retirement savings need to be reformed to help reduce the savings gap?”
Several factors are forcing Americans to work past the traditional retirement age, including the reduction in private-sector pension plans, prolonged economic hardship, plummeting home values and the prospects of reduced Social Security benefits.
As lawmakers consider potential cuts to future Social Security and Medicare benefits to help close the budget gap, 49 percent of those surveyed between the ages of 25 and 49 are willing to accept such cuts to help reduce the U.S. debt burden. Only 28 percent of those age 50 to 59, and 19 percent of those age 60 to 75 would be willing to accept cuts.
A majority of respondents, or 53 percent, said they “need to significantly cut back on spending today to save for retirement.”
Americans have saved, on average, only 7 percent of their desired retirement nest egg – a median of $25,000 in retirement savings vs. a median retirement goal of $350,000, according to Wells Fargo.
