BANK OF AMERICA
Americans Find Later Life Without Work to be Impractical and Undesirable
A new landmark study from Merrill Lynch, conducted in partnership with Age Wave, finds that nearly three out of four (72 percent) pre-retirees over the age of 50 say their ideal retirement will include working – often in new, more flexible and fulfilling ways. And with already half (47 percent) of current retirees having worked or planning to work during their retirement years, it will become increasingly common for people to seek work during this stage of their lives.
Based on a nationally representative survey of more than 7,000 respondents, “Work in Retirement: Myths and Motivations” is a comprehensive study exploring and challenging commonly held beliefs about work during retirement – a phenomenon driven by longer life expectancy, the elimination of most employee pensions, financial need and the reimagining of later life. The study also offers lessons learned from more than 1,800 working retirees surveyed about their own experiences – including tips to help prepare for a successful retirement career.
“This study turns conventional wisdom on its head,” said Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch. “By embracing these new realities and attitudes toward work in retirement, everyone from policy makers to employers and the financial industry will be better equipped to help people pursue their goals.”
“The New Retirement Workscape”
Results from the study indicate previous generations viewed retirement as a permanent end of work followed by continuous leisure. However, modern-day reality for many pre-retirees and retirees is a dynamic future that the study defines as “The New Retirement Workscape,” represented by four different phases:
“This study confirms that as people live longer and healthier lives, they’ll continue to find satisfaction from work even after they retire from their primary career,” said Ken Dychtwald, Ph.D., founder and CEO of Age Wave. “For many, work is an enriching experience that may not end at the age of 65 or even 70. Whether it’s continuing to do what they love, pursuing a long-desired interest or simply seeking to remain socially engaged, there’s a revolution brewing. People have come to realize that retirement doesn’t necessarily represent the end of an active life, but rather the beginning of new and exciting chapters.”
These realities are helping to debunk four myths about working in retirement as revealed through the study, including:
The study also defines – for the first time – the four types of working retirees, each with distinct priorities, ambitions and reasons behind why they choose to work during retirement:
1. Driven Achievers (15 percent of working retirees) tend to be workaholics, even in retirement, and feel they are at the top of their game so why slow down.
2. Caring Contributors (33 percent) are motivated primarily by their desire to give back and make a difference, either through volunteering or working for pay.
3. Life Balancers (24 percent) have discovered a less-stressful, more flexible way of working that allows them to keep their valued social connections, while maintaining much needed income.
4. Earnest Earners (28 percent) generally need the income and have far more frustrations and regrets about working at this time in their lives.
When working retirees were asked to share their best advice for people who want to work during retirement, more than anything they said “be open to trying something new” (76 percent) and “be willing to earn less to do something you truly enjoy” (73 percent). Other tips to help prepare for a successful retirement career include keeping up with technology – with seven times as many working retirees citing the importance of this vs. trying to appear younger as a means of improving their ability to work in retirement.
“Baby boomers are once again redefining a life stage,” said David Tyrie, head of Retirement and Personal Wealth Solutions for Bank of America Merrill Lynch. “They’re blazing a new path through retirement that is more fulfilling, stimulating, and financially viable for themselves and their families.”
To download “Work in Retirement: Myths and Motivations,” visit www.ml.com/retirementstudy. This report is the third in a series of in-depth studies focusing on seven life priorities, as defined through the new Merrill Lynch Clear program. Merrill Lynch Clear is a pioneering framework designed to connect people’s lives to their finances and help them live their best life in retirement. To explore additional content and resources related to these seven life priorities, visit www.ml.com/retire.
1Bureau of Labor Statistics, 2007Q1 to 2014Q1
2Bureau of Labor Statistics, 2014; Munnell A, “What Is the Average Retirement Age?”, Boston College, 2011
Age Wave is the nation’s foremost thought leader on population aging and its profound business, social, healthcare, financial, workforce and cultural implications. Under the leadership of founder and CEO Dr. Ken Dychtwald, Age Wave has developed a unique understanding of the body, mind, hopes and demands of new generations of maturing consumers and workers and their expectations, attitudes, hopes, and fears regarding retirement. Since its inception in 1986, the firm has provided breakthrough research, compelling presentations, award-winning communications, education and training systems and results-driven marketing and consulting initiatives to over half the Fortune 500. For more information, please visit www.agewave.com. Age Wave is not affiliated with Bank of America Corporation.
Merrill Lynch Global Wealth Management
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*Source: Bank of America. Merrill Lynch Global Wealth Management (MLGWM) represents multiple business areas within Bank of America’s wealth and investment management division including Merrill Lynch Wealth Management (North America and International), Merrill Lynch Trust Company, and Private Banking and Investment Group. As of March 31, 2014, MLGWM entities had approximately $1.9 trillion in client balances. Client Balances consists of the following assets of clients held in their MLGWM accounts: assets under management (AUM) of MLGWM entities, client brokerage assets, assets in custody of MLGWM entities, loan balances and deposits of MLGWM clients held at Bank of America, N.A. and affiliated banks.
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