FROM TRADITIONAL TO TRANSITIONAL: HOW THE NATION'S RETIREMENT MODEL IS CHANGING

FROM TRADITIONAL TO TRANSITIONAL: HOW THE NATION'S RETIREMENT MODEL IS CHANGING NEW YORK, February 10, 2020

Nearly six in 10 employers (57 percent) believe that within the next five years their workers will retire at older ages than today. On average, employers say their workers will retire at age 66, up from today's average of 64.5. As for those workers themselves? Forty-three percent say they expect to retire at age 65 or older and nearly 1 in 10 (9 percent) think they will never retire.

For many, the very definition of retirement is changing, as bridge jobs, gig work and encore careers replace the traditional notion of a fixed end to one's working life. Today, 54 percent of employers, 43 percent of workers and 29 percent of retirees think the commonly used definition of retirement should be expanded, which could include changes in the work model for older workers.

Those are just a few of the findings from MetLife's new Evolving Retirement Model Study, released today. The study was conducted by The Harris Poll on behalf of MetLife among 212 employers, 939 full-time employees, and 579 retirees.

'The traditional model of retirement - which assumed a fixed career end date and employer-paid benefits - is being replaced by a more transitional model,' says Graham Cox, executive vice president and head of Retirement & Income Solutions at MetLife. 'Today, retirement has evolved to be more fluid with an ebb and flow between work and retirement.'

Among those workers who have delayed retirement or expect to, the most common reasons cited for the delay is that they want to continue to build their retirement savings or maximize their pension benefits (45 percent), and they can't afford to retire and need income for expenses and bills (35 percent).

A possible solution?

Saving is a critical first step in preparing for a comfortable retirement, but workers and retirees also need to understand how to successfully spend down those savings. Nearly all workers and retirees (95 percent) say it's important for retirees to have a source of guaranteed income they cannot outlive.

Most employers (88 percent) agree on the need for retirees to have a source of guaranteed income that cannot be outlived. However, only 17 percent of employers who offer a defined contribution plan (e.g., 401(k) plan) say they currently have an option that enables plan participants to convert some or all of their savings into guaranteed income in retirement.

'Compared to 10 years ago when employers were concerned with 'brain drain,' today's employers are increasingly worried about the impact of delayed retirement,' said Roberta Rafaloff, vice president and head of Institutional Income Annuities at MetLife. 'The passing of the SECURE Act may give more employers the confidence to offer guaranteed income options which, in turn, could help improve employee financial confidence and enable a smooth transition to retirement.'