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Facts and Fiction of Modern Retirement – What Every 401k Fiduciary Should Teach Employees

July 08
00:11 2014

The foreboding doom and gloom of a less-than-perfect retirement can be found everywhere. The claim that the 401k – and thus, America’s retirement system – is broken has been repeated so often people simply assume it’s a fact. In 1136764_21619849_dreaming_in_a_grey_reality_stock_xchng_royalty_free_300Washington, politicians are threatening to “do something” (which usually ends up making matters worse). Across the country, people talk of “working forever,” “never retiring” and other such depressing sentiments.

Blame on the lingering effects of the market collapse in 2008/2009. Blame it on the dismal economy. Blame it on the record high number of people in the labor force who aren’t working. Whatever the reason, recent surveys show a vast majority of people who haven’t retired yet expect to continue working into their retirement years. But, despite this pessimism, there is surprising positive news among those who have actually retired.

Nancy Collamer of Old Greenwich, Connecticut, is the founder of and author of the book Second-Act Careers. As you might guess, she’s very familiar with what people really do when they retire. She says, “The new Merrill Lynch study shows nearly three quarters of the pre-retirees age 50 and older surveyed (72%) said their ‘ideal retirement’ includes work in some capacity.” The Merrill Lynch study, titled “Work in Retirement: Myths and Motivations” is based on interviews with more than 7,000 respondents in March 2014.

Sounds like a lot of people are planning to work during their retirement years, right? A funny thing happens though, once you pick up that gold watch. “Almost three-fourths of Americans state they wouldn’t mind working some in retirement. However, this drops down in retirement,” says Jamie Hopkins, Esq., Assistant Professor of Taxation in the Retirement Income Program at The American College in Bryn Mawr, Pa., and Associate Director of the New York Life Center for Retirement Income.

Several surveys confirm what Hopkins is saying. Adam Jordan, Director of Investment Research and Management at Paul Ried Financial Group, LLC in Bellevue, Washington says, “According to the Employee Benefit Research Institute’s (EBRI) 2014 Retirement Confidence Survey, the percentage of retirees who work for pay, in one form or another, is 27%.” In fact, EBRI’s survey, like the Merrill Lynch survey, also showed a supermajority (65%) of pre-retirees expects to work in retirement.

“According to AARP, approximately 22% of retirees continue to work at least part-time in retirement,” says Pamela J. Sams, Chartered Retirement Planning Counselor at Jackson Sams Financial Services in Herndon, Virginia. The AARP Study also shows that among pre-retirees, half expect to continuing working at least part-time for the rest of their lives.

There are many reasons why today’s retirees aren’t living the traditional retirement. Let’s take a look at some of them, their root causes, and how retirees have responded.

Next: What to Do When “Black Swan” Events Alter Retirement Expectations

Interested in learning more about issues facing today’s 401k investors and how professionals advise them? Check out Mr. Carosa’s upcoming book Hey! What’s My Number?, available later this summer.

Mr. Carosa is available for keynote speaking engagements, especially in venues located in the Northeast, MidAtantic and Midwestern regions of the United States and in the Toronto region of Canada.

About Author

Christopher Carosa, CTFA

Christopher Carosa, CTFA


  1. Nevin Adams
    Nevin Adams July 09, 08:14

    Chris, one thing worth noting; EBRI’s Retirement Confidence Survey has long shown that people tend to THINK they will work longer than they actually do. Moreover, in many cases, that decision isn’t voluntary – disability, illness (theirs or a family member), or something changes at work. Something that those thinking about retirement – or those who work with those thinking about retirement – may want to keep in mind. For more information, see

  2. Christopher Carosa, CTFA
    Christopher Carosa, CTFA Author July 09, 12:00

    Nevin: Excellent point and one that I’m afraid too many people might miss. One of the advisers I interviewed referred to these events as “Black Swan” events (hence the title of the second article in this series).

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