Same risks and fears, different decade.
reinventment
noun re·in·vent·ment \ rē-ən-ˈvent-mənt \
1a : an act of reinventing retirement
2: redefining retirement and reinventing life
Access and Emotions
Of more concern are lump-sum withdrawals before retirement, especially around job transitions; these “leakages” have reduced retirement wealth by at least 20 percent (Munnell and Webb 2015).
Lump-sum distributions before the ages at which penalties are lifted pose a greater risk to retirement well-being.
Why do most go back?
One Third of Retirees Reverse Retirement
According to a Federal Reserve Board study, a full 1/3 of those who retire eventually reverse retirement and return to work on either a full or part time basis.
Nearly half of today’s retirees currently work, have worked, or plan to work in retirement.
Some people work in retirement out of necessity to make ends meet..
Many retirees are shifting from full-time, often workaholic, careers to part-time work on their own terms in roles they enjoy.
- [Merrill Lynch Retirement Study. Finances in Retirement: New Challenges, New Solutions (p.21)]
Don't be that guy or gal who....
- ...goes back to work because you HAVE to.
- ...fears market volatility because it will DESTROY your retirement.
- ...lives a long time but does not have LIFETIME income.
Same Risks
- Longevity Risk (Living too long)
- Market Volatility
- Rising Costs/Healthcare Costs
- Inflation
- Interest Rates
- Withdrawal Rate (How much income you take)
- Sequence of Returns (Timing/When you take your income)
- BIGGEST RISK...EMOTIONS!
Different world
Boomers and GenX are arguably the last two generations that will realize income from private pensions in significant numbers, as defined benefit plans are disappearing at a brisk pace.
- [IRI BOOMER EXPECTATIONS FOR RETIREMENT 2018 (p.16)]
Despite sub-optimal engagement, employer sponsored defined contribution plans are an important part of the overall retirement picture for Boomers.
More than three-fourths of Americans (77 percent) say the disappearance of pensions has made it harder to achieve the American Dream.