By Cyril Tuohy
Beginning in 2011, when the first baby boomers born in 1946 turned 65, Americans were expected to start retiring at the rate of 10,000 a day. That’s how the refrain went— but four years removed from that oft-repeated statement, it seems as if retirement is turning into something more nebulous.
Is it really that 10,000 people a day are retiring? Or is it that 10,000 people a day eligible — mentally or financially — to shift gears into retirement if they so choose?
As surveys trickle out of life insurance research departments, the emerging picture of retirement is one that is less concrete than retirement of yore. As a group, retirees are more diverse than ever — and living longer too.
Dan Martin, managing editor for the Center for Financial Insight, said retirees today are in the process of redefining what it means to be retired. The Center for Financial Insight is a website sponsored by Jackson National Life for consumers, advisors and employees. “The landscape has shifted and we believe will continue to shift,” Martin said.
Fair enough. But shifted to what?
A recent survey revealed the existence of four broad groups named the Dreamers, the Calculators, the Second Careerists and the Rat Racers. The survey polled 2,662 pre-retirees working full-time or part-time with investable assets of $100,000 or more.
Dreamers, who made up nearly 40 percent of the respondents, said they planned to leave the workforce completely to pursue their lifelong dreams. The Calculators (20.4 percent of respondents) said they planned to delay retirement to secure a comfortable future.
The Secord Careerists (20.1 percent of respondents), said they planned to transition to a dream job after leaving their employers. Meanwhile, the Rat Racers (20.1 percent of respondents) said they loved their jobs so much that they had no intention of leaving their employers until deep into their golden years.
Pre-retirees certainly are a splintered group as many subgroups exist under those four broad categories, Martin said.
Experts have yet to coin a term for this new generation of retirees.
Are pre-retirees who intend to work in “retirement” down-shifting or part-timing? Are they independent workers or do they retain special status in the eyes of an employer? Are they quasi-retired or partially retired? So long as they don’t collect Social Security, are they even classified as retired in the eyes of the federal government?
For workers active into their 70s or 80s, when does retirement really start? If employers call back highly trained craftsmen to mentor workers or oversee special projects every 12 or 18 months, is the worker retired or simply furloughed?
Martin said that advisors who spend 10 hours a day with clients need to be careful about stereotyping clients and dealing with them in the same way.
Pre-retirees and retirees have such a variety of interests and needs that advisors must take a hard look at their books of business and provide differentiated levels of service based on the many profiles out there, Martin told InsuranceNewsNet.
Jackson’s survey results would seem to temper all the gloom and doom about people having to exist on food stamps after 40 years in the workforce. Data published this week by the Employee Benefits Retirement Institute estimates that the nation faces a $4.1 trillion retirement savings shortfall.
With more 40 percent of survey respondents — Second Careerists and Rat Racers — indicating that they prefer to remain in the workplace, what happened to those 10,000 people a day filing for Social Security benefits?
Take George Fraser, for instance, profiled in a recent news article. At 70, the former corporate executive travels 200 days a year as an author and speaker. No doubt, he’d qualify as a Rat Racer in the eyes of the Jackson survey, even if he’s elected to draw on Social Security.
Martin said that although many workers expect to exit the workforce with traditional retirement in mind – 40 percent of pre-retirees still define themselves as Dreamers – plenty more will reach age 65 or 70 with professional energy to spare.
Martin said that for advisors, the key is to understand the nuances among pre-retirees and the changes taking place. This will help advisors to present a clear picture of the value of their products and services, and help them to connect with a new generation of retirees who hold an expansive view of retirement.
“With findings like this, understanding the change of perception of investors is critical in terms of the level of support for the investor,” Martin said. “Each investor has unique needs and wants and goals.”
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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