For several generations, “retirement” has been envisioned as a kind of finish line. We work our 40 or so years, then we achieve a certain magical age – for many of our parents it was 65 – at which point we hang up the tool belt or the briefcase and move someplace sunny. One round of golf after another – that’s the so-called retirement dream.

Well, never mind the fact that millions of retirees have no intention of spending their so-called golden years on the golf course. The fact is, a majority of retirees might find themselves spending a lot of their time right where they’ve spent the past four decades: in the workplace. We just came across this article from Yahoo Finance in which senior columnist Kerry Hannon takes a look at current data. Research reveals that more than half of those hitting retirement age say they plan to keep right on working, many of them full time.

But will they be able to? Employer surveys suggest an ominous future. We’ll take a closer look.

Covering Savings Shortfall by Staying on the Job

“Many Americans plan to work longer to cover their retirement savings shortfall,” Hannon writes in her Yahoo Finance article. “But it may be a pipe dream.”  Hannon bases that conclusion on recent data from a familiar source – a survey by Transamerica of more than 5,700 workers, conducted in late 2022.

“According to a new survey by the nonprofit Transamerica Center for Retirement Studies (TCRS) 55 percent of workers plan to work after they retire,” she states. “That includes almost 20 percent who plan to work full time and more than a third who plan to toil part time. More eye-opening: a staggering 15 percent of all workers expect their primary source of retirement income to come from working.” That’s a lot of older workers who are counting on staying employed.

And, says Hannon, the figures are rising. Five years ago, 66 percent of baby boomer workers expected to postpone retirement until after age 65. Today that number is 71 percent. The survey respondents who say they plan to “retire” but keep on working stayed flat at about 55 percent.

Savings on the Rise, but Still Inadequate

The Transamerica survey does show signs that retirement savings are trending in the right direction, with total household retirement savings rising from $164,000 five years ago to $289,000 today. Still, “for many, their savings may be inadequate for a retirement that could last more than 20 years,” Catherine Collinson, CEO and president of Transamerica Institute and TCRS, told Yahoo Finance.

As a result, says Hannon, workers are unprepared for the retirement future. “The outlook is bleak for a hefty share of workers,” she writes. “Most workers (53 percent) say they simply don’t have enough income to save for retirement, according to the researchers. Those surveyed expect a range of sources of retirement income, including savings from 401(k) to Social Security. But more than a third—36 percent—said they’re planning on working to make ends meet.”

Will Aging Workers Qualify for Tomorrow’s Workplace?

Staying employed might seem like a viable strategy – but it might not turn out that way., “While working longer is all well and good, these folks may not want to bank on it,” Hannon warns.

Again, she quotes Transamerica’s Collinson. “In theory, envisioning working longer and retiring later sounds like an ideal solution to not having enough retirement savings,” Collinson said. “However, it can be very difficult to achieve in practice, especially if you’re not taking good care of your health and keeping your job skills up to date.”

As the Yahoo Finance article points out, in both these areas – worker health and job skills – agig workers may be lagging dangerously behind. “Put simply, many workers aren’t doing the work to ensure they can, well, keep working,” says Hannon. “Fewer than six in 10 workers say they’re staying healthy so they can continue working (58 percent), and less than half (49 percent) are keeping their job skills sharp. Even fewer workers are taking classes to learn new skills (24 percent), and earning a new degree, certification, or professional designation (17 percent).”

Desire to Work Driven by Financial Worries

“What’s spurring the work until you drop thing?” Hannon asks. “The lack of confidence in the retirement system from concerns about how much they have saved to uncertainty about Social Security and Medicare to not understanding where to turn for financial advice.”

To back this up, she quotes the latest annual survey by the Employee Benefit Research Institute (EBRI) and Greenwald Research which shows that retirement confidence in the U.S.  has declined by the largest margin since the Great Recession. One year ago, 73 percent of respondents said they were very or somewhat confident they’ll have enough money to live comfortably in retirement. Today that figure is 64 percent.

“That large of a drop in retirement confidence hasn’t happened since 2007 to 2008 and 2008 to 2009 when the economy was in a severe recession,” according to an EBRI spokesman.  

The reasons to stay on the job aren’t all negative. According to Hannon, the EBRI report shows that for workers who plan work past age 65, about 80 percent say it’s part of healthy aging. An equal number (78 percent) cite financial reasons to keep working. But fully one-third say they fear for the future of Social Security, while others say they “can’t afford to retire” (31 percent), and “need health benefits” (27 percent).

Working Longer Brings a Host of Benefits

Clearly, staying employed in some capacity after retirement age brings benefits, says the Yahoo Finance article. “The truth is continuing to earn a paycheck of some sort after stepping away from a primary career is a smart plan even if you have saved enough to cover your living expenses in retirement,” Hannon writes. By staying on the job, seniors build a financial safety net and leave retirement savings untapped for longer.

“And it can make it easier to delay Social Security benefits,” Hannon adds. “If you choose to wait to tap your benefits until age 70, you earn delayed retirement credits, which come to roughly an 8 percent per year annual increase in your benefit for each year between your full retirement age until you hit 70 when the credits stop accruing.”

Moreover, research continues to demonstrate that employment brings important psychological and health benefits. Workers tend to stay more engaged with a social network and they feel more relevant and independent.

Two Problems: Life’s Setbacks and Uncooperative Employers

But good intentions about staying on the job won’t count for much when life throws us a curve. “The problem is that life often comes at you with the unexpected,” says Hannon. These curveballs can include personal health issues that make working impossible. Also, many seniors find they have to quit work to care for a spouse or other family member.

“Another glaring glitch,” says Hannon: “A sizable 17 percent of workers say their employers are not age-friendly, per Transamerica. Only four in ten (41 percent) said their employer offers retirement transition assistance such as flexible work schedules and arrangements (23 percent). And a tiny 21 percent allow employees to trim work hours and shift from full-time to part-time, 18 percent enable workers to shift to positions that are less stressful or demanding.”

As Hannon acknowledges, lack of cooperation “is going to be a problem for the more than four in ten of workers who envision transitioning into retirement either by reducing their hours” or by working in a different, less-demanding capacity. “It’s exciting to see people setting their sights on longer working lives and recognizing the potential for living longer than earlier generations,” Transamerica’s Collinson said. “But by and large, many employers just aren’t getting it yet.” Collinson blames what she calls “an outdated mindset that work and retirement are mutually exclusive.”

Still, the article concludes, the outlook for older workers may be improving. “In the end, the worker shortage may provide more job opportunities,” says Hannon. She spoke with author and demographer Bradley Schurman who cites a steep drop in fertility rates which has “eviscerated” the workforce.

Employers will need to seek out new sources of labor, including older workers, Schurman told Yahoo Finance.  “And that’s pushing some leading employers to devise new retention and recruitment strategies.”

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(originally reported at https://finance.yahoo.com)