Prudential: Working in Retirement May Be the New Norm According to PGIM Investments Study

Originally Published by Prudential.

Few current retirees take a new job in their golden years—but more than half of future retirees expect to continue working during retirement, driven by uncertainty about Social Security and their own financial preparedness, a new study from PGIM Investments reveals. PGIM Investments is the global manufacturer and fund distributor of PGIM, Inc., the $1 trillion global investment management business of Prudential Financial, Inc.


The study, the 2018 Retirement Preparedness Study: A Generational Challenge, commissioned by PGIM Investments and conducted by The Harris Poll, found that while only 6 percent of today’s retirees work, 52 percent of pre-retiree Baby Boomers, 58 percent of pre-retiree Gen Xers, and 43 percent of pre-retiree Millennials expect to take on a full- or part-time job during retirement. These expectations may be linked to pre-retirees’ decreased reliance on Social Security—for example, only 51 percent of Millennials expect to receive these benefits at all.

“While changes in retirement expectations are often driven by pure economics, these study results also suggest a mind shift in how people are thinking about retirement. However, pre-retirees’ actions don’t always back up their goals,” said Stuart Parker, president and CEO of PGIM Investments. “To help them bridge this gap, the asset management industry will need to rethink the way that it does business and bring products and services in line with changing customer needs.”

According to PGIM Investments’ study:

The “dream retirement” is changing

  • Pre-retirees are more likely to base their decision about when to retire on their wealth rather than their age with half of Gen Xers and 62 percent of Millennials saying they will retire when they have saved enough money. Current retirees decided when to retire largely based on their age and eligibility for Social Security and pensions.
  • Millennials are more likely to start a business in retirement (20 percent) than Gen Xers (9 percent) or Boomers (four percent). Nearly four in 10 pre-retirees (39 percent) say they want to volunteer after they retire.
  • More than half (51 percent) of current retirees say they’re “living the dream.”On average, these individuals started saving six years earlier than other retirees. Compared with those who aren’t living their dream retirement, these individuals are more likely to have pensions and diversified sources of income. They also are more likely to have been able to retire at their planned retirement age.

Pre-retirees need to evolve their saving habits

Recently, trustees for Social Security announced that the program is operating at a deficit and will need to pull money from its reserves for the first time since 1982. Pre-retirees may not be prepared to fill the gap, PGIM Investments’ study finds:

  • Social Security benefits are the most critical source of income for 61 percent of retirees. By comparison, only 70 percent of Gen Xers and 51 percent of Millennials expect Social Security benefits when they retire.
  • Millennials are least likely to rely on Social Security for retirement income and are more heavily invested in cash and less invested in equities; nearly one in three aren’t saving for retirement at all.
  • More than half (53 percent) of pre-retirees are unsure how much they need for retirement. Gen Xers have the highest estimates of the savings they need, but almost one in five aren’t saving for retirement at all.
  • Pre-retirees need to expect the unexpected—51 percent of retirees say they retired earlier than expected. Of that group, half say they retired more than five years earlier than planned. In many cases, the reasons were involuntary, including health problems (29% of the early retirees), layoffs or restructurings (14%), the need to care for a loved one (13%), and the inability to find a new job (10%).

To address growing consumer need for retirement income planning, Prudential Financial, along with 23 other leading financial services organizations, established the Alliance for Lifetime Income to help educate Americans about the value of having protected income in retirement.

For more study results, download the report: 2018 Retirement Preparedness Study: A Generational Challenge.

Latest News

diversity in healthcare

DiversityInc and the Center for Healthcare Innovation present ‘Building Diverse Boards and C-Suites in Healthcare’

DiversityInc and the Center for Healthcare Innovation (CHI) have partnered for an upcoming webinar titled “Building Diverse Boards and C-Suites in Healthcare” which is scheduled for Wednesday, Feb. 3 at noon EST/11 a.m. CST. In the wake of the COVID-19 pandemic disproportionately impacting African Americans, followed by the rapidly shifting…

minimum, wage, $15

Is a $15 Per Hour Federal Minimum Wage on the Horizon?

The national minimum wage has sat at $7.25 per hour since 2009. Someone who works a full-time minimum wage job makes just over $15,000 a year. With the average rate for apartment rental in the U.S. costing close to $1,500 a month, there’s no way to survive on that salary…

Puerto Rico in crisis

Puerto Rico Declares ‘State of Emergency’ Over Wave of Gender-Based Violence; Twitter Launches New “Birdwatch” Community to Combat Misinformation; and More

Puerto Rico declares “State of Emergency” over recent wave of killings targeting women and transgender individuals. Newly sworn in Gov. Pedro Pierluisi has declared that Puerto Rico is under a state of emergency following a recent wave of gender-based violence across the territory. According to CNN, “At least 60 direct…

Cigna

New Cigna Study Shows Integrated Medical, Pharmacy and Behavioral Benefit Design Delivers Better Health Outcomes and Improves Affordability

Originally published at cigna.com. Cigna ranked No. 42 on The DiversityInc Top 50 Companies for Diversity list in 2020. Taking a whole-person approach to health by integrating Cigna medical, pharmacy and behavioral benefits drives better health engagement, outcomes and lowers total health care costs, according to Cigna’s fifth annual Value of Integration study,…

Accenture and Salesforce Expand Partnership To Help Companies Embed Sustainability Into the Core of Their Business

Originally published at newsroom.accenture.com. Accenture ranked No. 5 on The DiversityInc Top 50 Companies for Diversity list. Accenture and Salesforce are expanding their alliance to help companies embed sustainability into their business, meet growing customer and stakeholder expectations, and contribute to advancing the United Nations Sustainable Development Goals (SDGs). The…

President Biden enacts historic legislation

President Biden Continues Making History Just Days Into Office; the Disappearance of Racially Biased Standardized Testing for College Acceptance; and More

President Biden’s new administration continues to enact legislation at a breakneck pace. As the administration of 46th President Joe Biden starts its first full week in control of the White House, legislation setting a new course for the country continues to be approved at a record rate. Among the actions…