Redefining What It Means to “Retire”

Half of the Workforce with DC Plans Will Continue to Work Into Their Golden Years

July 2, 2014 – BOSTON–(BUSINESS WIRE)–The most recent retirement survey from State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT), indicates that 50 percent of retirement plan participants no longer see retirement as a reason to leave the workforce. Many expect a much more gradual shift from full-time work to at least part-time work in retirement. This presents a challenge to employers who need to make adjustments to how they manage talent to accommodate a mature workforce. It also shows that employers could improve benefits, such as savings boot camps and other financial literacy programs to address employees’ overall financial wellness, based on this new definition of retirement.

“There has been a major shift in the past 10 to 15 years and retirement plan participants are expecting to continue to earn in their retirement years,” said Fredrik Axsater, global head of defined contribution at SSgA. “The desire to continue working is not restricted by gender, age, savings, current income or education. This signals a big change in attitude toward retirement, and is indicative of the survey results showing that 40 percent of participants anticipate working well past retirement age because they want to work, not because they have to work.”


Survey highlights include:

  • Nearly three quarters (74%) of the respondents indicate that they were satisfied with the career choices they made before retirement. However, having their dream career in retirement is still envisioned by about 10 percent of participants.
  • The majority (65%) of DC participants picture themselves maintaining their current lifestyle in retirement.
  • Sixty-four percent of survey respondents between 50 and 75 years recommend investing earlier to their younger selves, another indication that those in middle-age are more apprehensive about retirement.

“Plan sponsors are in an advantageous position to influence the way employees are saving and spending,” said Axsater. “Conversations about lifestyle and influencing habits at an earlier point in an individual’s career can have a major impact on retirement preparedness.”

Plan Sponsor Improving Employees’ Retirement Planning IQ

There are many factors outside of the control of these survey respondents that can’t be anticipated. Today, less than 19 percent of those 65 years and older are still working1. Whether it’s poor health or overall difficulty maintaining employment because of out-of-date professional skills, there are a number of challenges. Twenty-seven percent of those surveyed, who were already retired, felt they had been forced into it.

SSgA’s most recent data shows that the conversations plan sponsors have with participants are imperative. Historical data also supports that retirement confidence rises when more conversations are had with family members, online or with an employer2. This dialogue will become more challenging and complex as the composition of the workforce changes and the meaning of retirement becomes more individualized. However, plan sponsors can help participants best achieve retirement readiness by increasing the number and the relevance of conversations about current needs and what a realistic future is for plan participants throughout their employment.

Plan sponsors are in an advantageous position to influence the way employees are saving and spending

Plan sponsors should keep three main points in mind as they consider retirement interventions with their employees:

  • Focus special attention on younger employees. Their long time horizons give them more opportunity to potentially benefit from a greater understanding of their savings options. Nearly 80 percent of DC investors surveyed would advise their younger selves to save more for retirement.
  • Introduce or expand automated features. In January 2013, a previous survey from SSgA found that participants do not want to be left to their own devices when it comes to saving for retirement3, and that they value help from plan sponsors, specifically as it relates to auto-enrollment and auto-escalation.
  • Help build participants’ overall financial wellness and aim to expand the conversation beyond a sole focus on retirement readiness. Participants will be better prepared for retirement if they are equipped to balance current needs and future goals throughout their careers. This becomes increasingly important as 49 percent of participants in SSgA’s January 2014 survey were looking to shift to more conservative investments4 and only about one third of the DC investors in the most recent survey use a financial advisor. Plan sponsors can engage participants throughout their employment with targeted communications that will help them meet obligations and be ready to retire when and how they see fit.

For more information on the survey or to subscribe to “The Participant” magazine, please click here.




About State Street Global Advisors
State Street Global Advisors (SSgA) is a global leader in asset management. The firm is relied on by sophisticated investors worldwide for its disciplined investment process, powerful global investment platform and access to every major asset class, capitalization range and style. SSgA is the asset management business of State Street Corporation, one of the world’s leading providers of financial services to institutional investors.

Primary research
This survey was fielded in partnership with TRC Market Research, an independent marketing research firm located in suburban Philadelphia. To protect respondents’ anonymity, TRC was responsible for survey administration and data analysis. SSgA received the aggregate data for analysis purposes only. The data were collected in April 2014 through a 10-minute Internet survey using a panel of 980 verified 401(k), 403(b), 457 and profit-sharing plan participants and retirees, aged 30 and older.

1Current Population Survey 2013, U.S. Bureau of Labor Statistics.

2SSgA DC Investor Survey, January 2013

3SSgA DC Investor Survey, January 2013

4SSgA DC Investor Survey, January 2014