Americans in all age groups are getting the picture that the old three-legged stool of income for retirement is just too wobbly—so they’re adding a fourth leg: work.

So says new research from the Transamerica Center for Retirement Studies, “Retirement Throughout the Ages: Expectations and Preparations of American Workers,” which found that retirement really isn’t all that “retired” any more, as many workers realize that current income models meant to support them in retirement aren’t going to provide what they need.

“The long-held view that retirement is a moment in time when people reach a certain age, immediately stop working, fully retire, and begin pursuing their dreams is more myth than reality,” said Catherine Collinson, president of TCRS, in a statement.

Collinson added, “Retirement has become a transition that may be phased over time or happen abruptly due to intervening circumstances.”

To support this view of workers’ new concept of retirement, the study offers the news that one out of every five workers (20 percent) plans to work as long as possible in their present position, or something similar, till they can’t work any more.

In addition, 41 percent are planning on reducing hours as a transition into retirement. Twenty-six percent say this is to give them more leisure time to enjoy life, while 15 percent say it will be in a different, less-demanding capacity or one that gives them greater personal satisfaction.

Another 18 percent say they aren’t sure how they’ll transition into retirement.

The way expectations are changing shows in where people expect the money for retirement to come from. While 69 percent are looking to Social Security and 68 percent say retirement accounts (401(k)s, 403(b)s and IRAs), 45 percent cite other investments. But 37 percent say that work will provide income, compared with just 23 percent expecting defined benefit plans to kick in. Thirteen percent will get money from home equity and 11 percent are hoping for an inheritance.

Along with those changing expectations, the study explored the attitudes and savings success of workers in each decade of their working lives.

Among those in their 20s, 67 percent already are putting money away for retirement, even though they’re also dealing with the twin handicaps of student loan debt and credit card debt. The median age at which they’re starting to save for retirement is 22—no doubt spurred on by what they’ve seen among older family members during the Great Recession.

But just because they’re saving doesn’t mean they understand investing, with 37 percent saying they know “nothing” about asset allocation and 27 percent saying they are “not sure” how what they’re putting away is invested. Those who do know how their savings are invested are taking few chances with what they save, despite the long time horizon till retirement, with 24 percent sticking to investments that are long term and low risk.

Workers in their 30s started a bit later than the twentysomethings, beginning to save for retirement at a median age of 25. A higher percentage of them are saving, too, with 76 percent doing so. And 30 percent of those who are participating in a 401(k) or similar plan are socking away an impressive 10 percent of annual pay. Impressive, but still not as high as experts say they’ll need.

Many don’t know, or don’t feel they know, much about investing, with 57 percent saying they “guessed” at retirement investments and 68 percent saying they don’t know as much as they should about what they’re doing. Nonetheless, 87 percent are making their own decisions about those investments, with some doing their own research and others looking for advice.

Workers in their 40s are really pretty demoralized when it comes to retirement, with just 10 percent saying they’re “very” confident they can retire completely with a comfortable lifestyle. Seventy-six percent are saving for retirement, with this group having started at a median age of 30, but 22 percent say that their biggest priority is not retirement but paying off credit card or consumer debt.

In addition, among those with a 401(k) or similar plan, 24 percent have taken a loan or early withdrawal. Only 23 percent are managing to put away that impressive 10 percent, even though 82 percent are participating; instead they’re putting away a median of 7 percent. Comes with having both kids and parents to take care of, in addition to battling the Great Recession.

Eighty percent of folks in their 50s are saving for retirement, after starting at a median age of 31, and 83 percent of those able to participate in a 401(k)-type plan are doing so—and trying to make up for lost time. Thirty-one percent are putting away more than that magic 10 percent.

Only 14 percent have a written-out retirement plan, although 46 percent say they have an unwritten plan. The other 40 percent? Who knows? And even with 60 percent saying they have some kind of plan, 52 percent say they “guessed” how much they’d need. Therefore, it might come as no surprise that 59 percent either plan to work past the age of 65 or don’t plan to retire at all—particularly since their estimated median level of total household retirement savings is just $117,000.

Now about those sixty and older: 82 percent say they are already working past 65, plan to do so or do not plan to retire at all. Fifty-six percent say it’s because they can’t afford to retire, or because they need the income or health benefits.

Seventy-three percent say that whatever transition to retirement they do have will happen at their place of work, but few of them say their employer has a plan to help them perhaps move to part-time work or make some other adjustment into retirement rather than just leaving.

And 47 percent intend to rely on Social Security as their primary source of income, despite the fact that 29 percent say they don’t know a whole lot about it.

When it comes to savings, this older group has put away an estimated median of $172,000, but 39 percent say they’ve stashed $250,000 or even more. They’re the lucky ones.

Instant Insights /

Retirement is changing to&mdash;working?

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