Younger investors planning to work in retirement

A laid-back retirement? It's not in the works for most younger investors, who see already that they're probably going to have to keep working in their golden years, to stay afloat - for both fiscal and lifestyle reasons.

Data from T. Rowe Price's IRA Survey indicates that almost three-quarters of investors aged 21-50 recognize that they will likely continue to work, either full- or part-time, during their traditional retirement years, though the reasons are more optimistic than most surveys.

Three-quarters of those who suggested they'd still work part-time told the investment management company they would be doing it to remain active and involved in the business world, while less than a quarter said it would be a necessity because they hadn't saved enough money for retirement.

The 860 investors surveyed in the Generation X and Y age groups also have fairly healthy and positive views of their potential retirement. On average, they believe the mean age they'll plan to retire at is 62 and, on average, they expect to live 22 years of retired life.

They do see some hurdles on the horizon: three-quarters expect tax rates will increase between now and the time they retire, and 43 percent expect the aforementioned part-time job in retirement to be a regular source of income.

"Beginning with the Baby Boom generation, a new vision of retirement has emerged—one that includes an active lifestyle and, for many people, continued work or even a second career," said Christine Fahlund, CFP, senior financial planner with T. Rowe Price, in a statement.

"This survey suggests that, looking ahead, many younger investors are ready to adopt this relatively new approach to retirement, as well. It's encouraging that they plan to do this as a choice and not out of financial necessity. Of course, their ability to be flexible about their retirement date will require getting an early start on their savings."

Fahlund said working a little longer may not be so bad as it could mean more significant Social Security payments, if retirees delay drawing benefits.


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