Older Americans are ready to opt out of the workforce altogether even if it means a more modest retirement, a new survey found.
“The buzzword is the great resignation,” Peter Hershon, senior vice president of account services at Coventry Direct, told Yahoo Money. “We are seeing more and more seniors, whether by choice or due to unforeseen circumstances, leaving the workforce, sometimes at a younger age than they originally anticipated, and just wanting to be done.”
Almost 4 in 5 Boomers reported they would rather retire at age 65 and live out their years in modesty than work until age 75 and live large, according to an online survey of 1,512 Americans conducted in August from Coventry Direct.
And they aren't interested in a second act or encore career in retirement either — even if it's in a passion project or gig. Fifty-five percent of respondents said they weren’t considering a career post-retirement.
Boomers 'move in a different direction' with early retirement
The pandemic has caused a great financial and lifestyle reprioritization for Baby Boomers, Hershon said, who have exited the workforce and embraced retirement more in 2020 than in the last decade.
That bucks the trend of the last decade, which was to work as long as possible while continuing to save. Hershon attributed the shift to the pandemic and said: “People...have reached the point of exhaustion.”
For the Boomers still working, workplace changes over the last 18 months have forced the generation to adapt and adopt technology like never before, and it might have triggered a breaking point for some.
After a 40-year career, a forced adjustment to a new way of productivity, connectivity, and new protocols have either been embraced or rejected, Hershon explained. “For some people, it works and others need to move in a different direction,” he said.
But for the nearly 1 in 5 boomers who have no form of retirement income, an early retirement might be out of the question for those without sizable nest eggs. A third of Boomer respondents cited it was a lack of money that held them back from achieving their retirement goals.
Those with some savings are willing to use it all and not leave a financial legacy if it means 10 fewer working years, an intention shared by 77% of Boomers.
Financial planning for Boomers has undergone a sea change, Hershon explained. Whereas the goal was once to transfer wealth to the younger generation, it has been replaced with the understanding and practice that nest eggs are income for today. The change of heart for Boomers means that 55% are in favor of spending on meaningful experiences rather than saving — a mentality the pandemic may have reinforced.
“[Boomers] want to focus really on making memories with their friends, with their loved ones and utilizing their capital and their savings for the benefit of doing that,” Hershon said. “In some ways...a lot of it has to do with making up for lost time.”