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Phasing into Retirement: Older Americans' Experiences with Work and Retirement Planning

Research Highlights

Phasing into Retirement
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Phasing into Retirement: Older Americans’ Experiences with Work and Retirement Planning

The notion of retirement in the United States has shifted in recent years. Americans are working later in life, and retirement no longer represents a complete departure from the workforce. To explore these issues, The AP-NORC Center for Public Affairs Research has undertaken a series of major studies on older Americans’ experiences in the late phases of their careers, their preparations for retirement, and the realities of retired life in the United States.

The 2017 study offers new insights on the experiences of Americans age 50 and older with respect to unemployment, saving enough for retirement, and needing to withdraw money from retirement accounts prior to retiring. These new findings suggest that 1 in 5 older Americans have grappled with a recent period of unemployment, and for many, other financial obligations are prioritized over saving for retirement. Nearly 8 in 10 Americans age 50 and older who are currently working and not yet retired say they have not saved enough for retirement in the past 10 years.

The survey results reveal a modern form of retirement that doesn’t happen all at once but instead comes in phases. While most Americans in this age group can easily be classified as either working or retired, 1 in 10 fall somewhere in the middle, reporting that they have retired but are either still working or looking for work. Among the 37 percent of older Americans who are still working and not yet officially retired, nearly 9 in 10 say it is at least somewhat likely that they will do work for pay during their retirement. The findings suggest that work behaviors and retirement attitudes shift depending on where one is situated on the spectrum of retirement; those who are still working are anxious about retirement, while retirees express excitement, and those who are working during retirement may work part-time to take on fewer hours than those who have yet to retire.

This study updates the 2016 reports on work1 and retirement planning2 and finds that most trends remain stable; age is not slowing older workers down, and one-third have furthered their education. Most Americans are at least somewhat financially prepared to retire, with many relying on Social Security income as their main source of income during retirement.

The AP-NORC Center, with funding from the Alfred P. Sloan Foundation, conducted 1,683 interviews with a nationally representative sample of Americans age 50 and older. Key findings from the survey, summarized below, offer a glimpse into the work life and retirement plans of adults age 50 and older in the United States.

  • Among those who do not consider themselves to be retired, 18 percent expect to retire before turning 65, 33 percent say they will retire between the ages of 65 and 70, and 18 percent say they will retire after turning 70. Fully 27 percent say they never expect to retire.
  • Adults 50 and older cite finances and health as the most important factors in the decision about when to retire. Over 6 in 10 say their financial needs and their health will be or were important in their decision about when to retire.
  • A quarter of adults age 50 and older who are not yet completely retired say they have received job training or gone back to school in the past five years. Among those who have, over half have received on-the-job training (63 percent) or have taken a course or courses for a continuing education unit (CEU) to maintain a professional license or fulfill a job requirement (55 percent).
  • Overall, 27 percent of older Americans say they are very or extremely financially prepared for retirement, and another 37 percent say they are somewhat financially prepared. Thirty-five percent say they are not very or not at all financially prepared.
  • For a majority of Americans age 50 and older, retirement brings more excitement than fear. Fifty-two percent say that in general, they are more excited than anxious about their retirement, while 43 percent feel more anxious than excited.
  • A substantial minority of older Americans think that they will outlive their nest egg for retirement. More than 4 in 10 say they will outlive their savings, an increase from 2016 when 32 percent said they expected the same.
  • Overall, 66 percent of retired Americans age 50 and older say they retired by choice, while 34 percent say they had no choice but to retire. Out of seven often-cited reasons for retirement, the most common reason among older workers is having a health problem or disability, with a third of older retirees citing this reason.
  • Older Americans will rely heavily on Social Security during retirement, as 77 percent say they will receive Social Security during retirement. Among those who will receive it, half say it will be their largest source of retirement income.
  • Twenty-nine percent of older Americans with a retirement account have had to borrow money from it before reaching retirement.

things to know

More than Half of Americans Age 50 and Older Have Already Worked past the Traditional Retirement Age or Plan to Do So.

Just under half of Americans age 50 and older are working in some capacity or looking for work.

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Combining those who have already done some work for pay beyond the age of 65 with those who plan to do so yields a majority of older Americans working past the conventional retirement age. This includes those remaining in the workforce full-time, working for pay in some capacity after officially retiring, or taking some other path toward a longer career.

The reasons for working longer are varied. Nearly 6 in 10 say that financial concerns (59 percent), staying busy (58 percent), and enjoying the work (56 percent) are major reasons why they have chosen to work past the traditional retirement age.

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Half of Those Who Have yet to Retire Expect to Work until They Reach the Age of 70, Though Nearly 3 in 10 Say They Will Never Retire. Financial Needs and Health Are the Biggest Factors Contributing to the Decision about When to Retire.

Among those who do not consider themselves to be retired, 18 percent expect to retire before turning 65, 33 percent say they will retire between the ages of 65 and 70, and 18 percent say they will retire after turning 70. Fully 27 percent say they expect never to retire.

Older Americans’ perspectives about retirement seem to shape their decisions about how long to stay in the workforce. Those who say they are more excited than anxious about their retirement are more likely to plan on retiring earlier in life. Older Americans who are more excited about retirement are nearly twice as likely as those who are anxious to plan to retire before age 65 (26 percent vs. 14 percent), and those who are more anxious are more than three times as likely to say they will never retire (38 percent vs. 11 percent).

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As for specific factors driving the decision about when to retire, adults age 50 and older cite finances and health as the most important factors. Over 6 in 10 say their financial needs and their health will be or were important in their decision about when to retire. Just over half rate their need for employer-sponsored benefits as highly important, and just under half attach high importance to their ability to do their job as important. Fewer cite wanting more free time, satisfaction with their job, and their partner’s plans for retirement as important factors for retirement decisions.

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Most Workers Anticipate They Will Work During Their Retirement.

Along with the finding that many older adults are working past the age of 65, the results of the 2017 survey show that a majority expect to work even after officially retiring. Among Americans age 50 and older who are not already working during their retirement, 28 percent say they are likely to do so, 26 percent say it’s somewhat likely, and 46 percent say it’s not likely. Fifty-three percent of those who are currently working and do not consider themselves retired say it’s extremely or very likely that they will do work for pay during their retirement. Among those who say they are already completely retired, only 6 percent say it’s likely they will come out of retirement to work for pay at some point in the future.

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Among those who are not already working during their retirement, younger adults are more likely to expect to work during retirement than those who are older (40 percent of those age 50 to 54 and 45 percent of those age 55 to 59 vs. 28 percent of those age 60 to 64 and 13 percent of those age 65 and older), as are those who hold college degrees (36 percent of those with a college degree vs. 24 percent of those with less than a college degree).

For Most, Age Doesn’t Slow down Older Workers. Few Are Taking on Less Demanding Tasks or Are Decreasing Their Hours.

On average, Americans age 50 and older who are working in any capacity work about 37 hours per week, with 59 percent who say their typical work week is at least 40 hours, including 16 percent who say they work more than 50 hours a week. Those who are working during retirement are more likely to work part-time.

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Fifty-four percent have not changed their weekly work hours in the last five years, while 16 percent say they have increased the number of hours they work each week and 30 percent say they have decreased their hours.

While most older Americans who are currently working and not retired or who are working during retirement report that the number of hours they work has stayed roughly the same over the past five years, a majority say that their pay has increased (51 percent) rather than stayed constant (31 percent) or decreased (18 percent).

Few show signs of pulling back on work tasks; 72 percent report that they have not tried to take on less physically demanding tasks at work and 83 percent say the same for mentally demanding tasks.

A Third of Older Workers Have Gone Back to School in the past Five Years. Those Who Have Searched for a Job in That Time Period Are More Likely to Seek out Additional Education or Job Training.

A quarter of adults age 50 and older who are not yet completely retired say they have received job training or gone back to school in the past five years. That figure increases to a third among those pre-retirement adults age 50 and older who are currently working.

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Those who are currently looking for work or who have searched for a job in the last five years are more likely than those who have not to say they have received job training or have gone back to school (33 percent vs. 21 percent).

Of those who received additional training or education in the past five years, over half have received on-the-job training (63 percent) or have taken a course or courses for CEUs to maintain a professional license or fulfill a job requirement (55 percent). Fewer have taken courses toward a degree or certificate (36 percent) or received other specialized training (38 percent).

The reasons for going back to school or getting job training are varied; 40 percent report doing so because their employer required it, 37 percent say it was to learn something new or just for fun, 35 percent say it was to advance in their current job, 23 percent say it was to help start a new career, and 16 percent say it was to help get a new job in their current field.

One in 5 Adults in the Workforce over the Age of 50 Have Been Unemployed in the Last Five Years.

Eighteen percent of all adults age 50 and older and 20 percent of those who are currently working and not yet retired say they have been unemployed at some point during the last five years. Among those with recent unemployment experiences, 26 percent say their longest stretch of unemployment was less than six months, 20 percent say it was six months to under a year, and 51 percent say they were unemployed for a year or more.

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Regardless of their employment status, 1 in 4 adults age 50 and older have searched for a job in the last five years, 51 percent of whom found their job search to be moderately or very difficult.

Of those who have searched for a job or have been unemployed in the past five years, 13 percent report that they have not had luck finding a job in that time period, while another 18 percent have worked at least three different jobs during that time.

A Majority of Retired Americans Age 50 and Older Say They Retired by Choice. Fewer Were Forced to Retire for Health Reasons.

Though some older workers find themselves in the situation of forced early retirement, a large majority of retired Americans say they retired by choice. Overall, 66 percent of retired Americans age 50 and older say they retired by choice, while 34 percent say they had no choice but to retire.

Those with more education are more likely to say they were able to retire by choice, though a majority of all educational groups say they retired voluntarily. While 3 in 4 adults age 50 or older with a bachelor’s degree or higher retired by choice, the same is true for just 59 percent of those with a high school diploma or less.

Out of seven often-cited reasons for retirement, the most common reason among older workers is having a health problem or disability, with a third of older retirees citing this reason. Another 28 percent say they retired because they could no longer meet the physical demands of their job. Fewer than 3 in 10 say there were changes at their company, such as downsizing or closure; they had to care for a spouse or another family member; they were unemployed and could not find work; and the job changed and required skills that they did not have. One quarter say they retired because they wanted to do something else.

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Most Older Americans Express Excitement about Retirement.

For a majority of Americans age 50 and older, retirement brings more excitement than fear. More than half say that, in general, they are more excited than anxious about their retirement, while 43 percent feel more anxious than excited. However, those who are already completely retired are more likely to feel excited about it than those who are still working and have not yet retired.

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When it comes to specific aspects of retirement, over half of Americans age 50 and older say they feel secure about being able to keep up with housing payments and their physical health. Fewer feel secure about the amount of savings they have for retirement and being able to pay for major unexpected medical expenses.

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Many of these feelings about retirement also differ by gender and income. Consistent with the 2016 Working Longer survey cited above, those who have lower incomes are more likely to feel anxious about retirement in general, as well as about specific financial aspects of retirement.

A Majority of Americans Age 50 and Older Report Feeling at Least Somewhat Financially Prepared for Retirement, with Those Who Are yet to Retire Expressing More Concern.

Overall, 27 percent of older Americans say they are very or extremely financially prepared for retirement, and another 37 percent say they are somewhat financially prepared. Thirty-five percent say they are not very or not at all financially prepared.

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Among Americans age 50 and older who are completely retired, 7 in 10 recall being at least somewhat financially prepared when they retired, including 38 percent who say they were very or extremely prepared and 33 percent who say they were somewhat prepared. Twenty-eight percent say they were not prepared.

However, workers who have yet to retire feel less ready. Among those who are working and not retired, 4 in 10 say they are not very or not prepared at all for retirement, and just 17 percent feel extremely or very prepared. Another 43 percent say they feel somewhat prepared.

Adults age 50 and older evaluate the financial readiness of their peers similarly. When assessing the retirement planning of older Americans in general, fewer than 3 in 10 think the average American age 50 to 65 is extremely or very financially prepared for retirement. Forty-six percent say the average older American is somewhat prepared, and 1 in 4 say the average American is not financially prepared.

Most Americans Age 50 and Older Expect to Have Enough Savings to Last Throughout Retirement, Though Many Will Need to Reduce Their Spending.

Few express confidence that their savings will last the length of their retirement. Thirty-eight percent say they are not very or not at all confident that their total retirement income will last throughout their retirement, 32 percent are somewhat confident their income will last, and just 28 percent are very or extremely confident.

Just over half of older Americans say their savings will be enough to cover expenses throughout retirement, while a substantial minority thinks that they will outlive their nest egg for retirement. Fifty-three percent of Americans age 50 and older say either that their savings will outlive them (16 percent) or that their savings will be just about right to cover their needs throughout retirement (37 percent). Four in 10 say they will outlive their savings.

While many seniors naturally reduce some day-to-day expenses during retirement, 52 percent of older Americans say they will be forced to decrease their spending when they retire or later in their retirement, 43 percent say they will be able to keep their spending about the same, and 5 percent say they will be able to increase their spending.

Social Security Factors Big in Older Americans’ Retirement Plans.

Older Americans will rely heavily on Social Security during retirement, as 77 percent say they will receive Social Security during retirement. Among those who will receive it, 42 percent say it will be their largest source of retirement income.

Forty-one percent plan on drawing Social Security prior to turning 65, and 8 percent say they plan on taking Social Security after turning 70. Forty-two percent say they will begin to take Social Security between the ages of 65 and 69.

Fifty-three percent have three or more sources of income for retirement, 23 percent have two sources, 17 percent have one source, and 6 percent have none. Retirement accounts such as a 401k, 403b, IRA, or SEP plan and pensions round out the top three sources of retirement income for older Americans. Smaller numbers of older Americans have retirement income in the form of other investments, income from the sale of real estate or businesses, disability payments, inheritances, or trust funds.

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Seven in 10 Workers Age 50 and Older Are Saving for Retirement, but Few Say They Have Saved Enough over the past 10 Years.

Among those who are currently working and not retired or working during their retirement, 70 percent say they are saving money for retirement in addition to Social Security, and 30 percent say they are not. Among workers and the retired alike, however, few say they have saved enough in the recent past for retirement. Seventy-eight percent of those who are currently working say they have not saved enough for retirement in the past 10 years. Fifty-two percent of those who are completely retired say they did not save enough for retirement in the 10 years prior to retiring.

Not having much money left over after paying bills and having too many other financial responsibilities are the most common reasons older Americans haven’t saved as much for retirement as needed.

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One in 4 Say They Have Had to Borrow Money from a Retirement Plan, Most Commonly to Pay for Monthly Expenses.

Twenty-nine percent of those with a retirement account and 25 percent of older Americans overall have had to borrow money from a retirement plan. Among those who had to borrow, 34 percent say they did so to pay for monthly expenses, 23 percent say they used the money to pay down credit card debt, and 23 percent say they paid for an unexpected expense. Fewer say they used the money to live on during unemployment (17 percent), to pay for a down payment on a house (14 percent), to pay for a child’s tuition (8 percent), and to pay for care for a family member (5 percent).

Study Methodology

This survey was conducted by The Associated Press NORC Center for Public Affairs Research and with funding from the Alfred P. Sloan Foundation. Data were collected using AmeriSpeak®, NORC’s probability-based panel designed to be representative of the U.S. household population. During the initial recruitment phase of the panel, randomly selected U.S. households were sampled with a known, non-zero probability of selection from the NORC National Sample Frame and then contacted by U.S. mail, email, telephone, and field interviewers (face-to-face).

Interviews for this survey were conducted between February 14 and March 13, 2017, with adults age 50 and over representing the 50 states and the District of Columbia. Panel members were randomly drawn from AmeriSpeak, and 1,683 completed the survey—1,049 via the web and 634 via telephone. The sample also included oversamples of African American and Hispanic adults—332 African Americans and 308 Hispanics. Interviews were conducted in both English and Spanish, depending on respondent preference.

The final stage completion rate is 39.5 percent, the weighted household panel response rate is 34.4 percent, and the weighted household panel retention rate is 94.7 percent, for a cumulative response rate of 12.8 percent. The overall margin of sampling error is +/- 3.0 percentage points at the 95 percent confidence level, including the design effect. Among subgroups, the margin of sampling error at the 95 percent confidence level is +/- 3.5 percentage points for African Americans and +/- 4.6 percentage points for Hispanics.

Once the sample has been selected and fielded and all the study data have been collected and made final, a poststratification process is used to adjust for any survey nonresponse as well as any noncoverage or under- and oversampling resulting from the study specific sample design. Poststratification variables included age, gender, Census division, race/ethnicity, and education. The weighted data reflect the U.S. population of adults age 18 and over.

All analyses were conducted using STATA (version 14), which allows for adjustment of standard errors for complex sample designs. All differences reported between subgroups of the U.S. population are at the 95 percent level of statistical significance, meaning that there is only a 5 percent (or less) probability that the observed differences could be attributed to chance variation in sampling. Additionally, bivariate differences between subgroups are only reported when they also remain robust in a multivariate model controlling for other demographic, political, and socioeconomic covariates.

A comprehensive listing of all study questions, complete with tabulations of top‑level results for each question, is available on The AP‑NORC Center for Public Affairs Research website: www.apnorc.org.

About The Associated Press-NORC Center for Public Affairs Research

The AP-NORC Center for Public Affairs Research taps into the power of social science research and the highest-quality journalism to bring key information to people across the nation and throughout the world.

  • The Associated Press (AP) is the world’s essential news organization, bringing fast, unbiased news to all media platforms and formats.
  • NORC at the University of Chicago is one of the oldest and most respected, independent research institutions in the world.

The two organizations have established The AP-NORC Center for Public Affairs Research to conduct, analyze, and distribute social science research in the public interest on newsworthy topics, and to use the power of journalism to tell the stories that research reveals.

The founding principles of The AP-NORC Center include a mandate to carefully preserve and protect the scientific integrity and objectivity of NORC and the journalistic independence of AP. All work conducted by the Center conforms to the highest levels of scientific integrity to prevent any real or perceived bias in the research. All of the work of the Center is subject to review by its advisory committee to help ensure it meets these standards. The Center will publicize the results of all studies and make all datasets and study documentation available to scholars and the public.

footnotes

1. AP-NORC Center for Public Affairs Research. 2016. Working Longer: The Disappearing Divide between Work Life and Retirement. http://www.apnorc.org/PDFs/Working%20Longer%202016/2016-05%20AP-NORC%20Working%20Longer_Report1.pdf
2. AP-NORC Center for Public Affairs Research. 2016. Retirement Planning in America: Anxiety, Inequality, and the Role of Social Security. http://www.apnorc.org/PDFs/Working%20Longer%202016/2016-05%20AP-NORC%20Retirement_DTPB_v2r4.pdf

Navigation

Phasing into Retirement: Older Americans’ Experiences with Work and Retirement Planning

More than Half of Americans Age 50 and Older Have Already Worked past the Traditional Retirement Age or Plan to Do So.

Half of Those Who Have yet to Retire Expect to Work until They Reach the Age of 70, Though Nearly 3 in 10 Say They Will Never Retire. Financial Needs and Health Are the Biggest Factors Contributing to the Decision about When to Retire.

Most Workers Anticipate They Will Work During Their Retirement.

For Most, Age Doesn’t Slow down Older Workers. Few Are Taking on Less Demanding Tasks or Are Decreasing Their Hours.

A Third of Older Workers Have Gone Back to School in the past Five Years. Those Who Have Searched for a Job in That Time Period Are More Likely to Seek out Additional Education or Job Training.

One in 5 Adults in the Workforce over the Age of 50 Have Been Unemployed in the Last Five Years.

A Majority of Retired Americans Age 50 and Older Say They Retired by Choice. Fewer Were Forced to Retire for Health Reasons.

Most Older Americans Express Excitement about Retirement.

A Majority of Americans Age 50 and Older Report Feeling at Least Somewhat Financially Prepared for Retirement, with Those Who Are yet to Retire Expressing More Concern.

Most Americans Age 50 and Older Expect to Have Enough Savings to Last Throughout Retirement, Though Many Will Need to Reduce Their Spending.

Social Security Factors Big in Older Americans’ Retirement Plans.

Seven in 10 Workers Age 50 and Older Are Saving for Retirement, but Few Say They Have Saved Enough over the past 10 Years.

One in 4 Say They Have Had to Borrow Money from a Retirement Plan, Most Commonly to Pay for Monthly Expenses.

Footnotes