As workers experience large losses in their retirement funds, a significant number are planning to delay their retirement, according to a new survey.
The survey, by benefits consultancy Watson Wyatt, found that 34 percent of all workers have increased their planned retirement age in the last 12 months.
The changes are more pronounced for older workers. Forty-four percent of those aged 50 and over plan to delay their retirement, compared with only 25 percent of those under 40. Although the average planned retirement age for all employees is 65 years old, 50 percent of those aged 50 or more plan to retire at age 66 or later.
About 76 percent of older workers aged 50 to 64 cited the decline in the value of their 401(k) accounts as the most important reason why they are planning to postpone their retirement, followed by the high cost of health care (63 percent) and higher prices for basic necessities (62 percent). Of this group, more than half (54 percent) also indicated that they would work for at least three years longer than previously expected. The Watson Wyatt survey was conducted in February 2009 and includes responses from more than 2,200 full-time workers.
The survey also found that workers who participate in a defined contribution-only plan, such as a 401(k), are more likely to delay retirement than those with a defined benefit plan, such as a monthly pension. Only 26 percent of those with DC plans plan to retire before the age of 65, compared with 41 percent of those with DB plans.
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