When Oliver Tutt talks about the right time to retire, it might be a good idea to listen.
As managing director of Randall Financial Group in Providence, where about 60 percent of the clientele is within five years of retirement on either side of the milestone, he knows a thing or two about planning for the future.
That knowledge encompasses realizing when it’s time to rework a plan, including his.
“I would love to think I’d retire at 60,” said Tutt, who is 42. “[But] when I actually get to 60, you think, what the heck else am I going to do? I don’t see [retirement] as a light switch. I see it as a fade to gray.”
Tutt is talking about a societal trend to prolong a professional life that could, he and other area financial planners say, account in part for the fact that the average age of an American retiree continues to creep up toward 70.
According to Gallup’s annual Economy and Personal Finance Survey released last spring, 39 percent of nonretirees expect to retire after the age of 65. That percentage increased from 21 percent in 2012 and from 12 percent in 1995.
According to the survey, those polled who are 40 years and older expected to retire at age 68.
“I don’t think 65 is the norm anymore,” said Dan Forbes, who owns Forbes Financial Planning, Inc. in Providence. “I think for the average it’s shifting anywhere from 67 to 70 and then you have a group that is working part time. The mindset has definitely shifted.”
The reasons are neither strictly financial nor cultural.
Today’s midcareer workers, including Tutt, have survived – and thrived – within a “do more with less” and achievement-driven environment that has resulted, for some, in an ability to let that part of their life end.
Mostly gone, he and others said, are the days of biding one’s time at the office until a pension is handed out and then relaxing with a fishing pole or an RV ride across the country.
“I think it’s how people receive retirement. It’s gone from the idea of here is the day I stop working and start hitting the golf course to now it’s more of, I want my lifestyle to be more leisurely but I don’t mind working,” Tutt said. “Most of my clients like what they do. They probably just want to be able to do it less and pursue some of their other passions.”
The Gallup poll reported a new low, according to a release, of just 38 percent of nonretirees saying they will have enough money to live comfortably in retirement, down from 42 percent last year.
The poll also reported that 64 percent of respondents age 40 and older thought they wouldn’t have enough money to live comfortably after they retire.
The Insured Retirement Institute, a nonprofit based in Washington, D.C., released in September research that found a majority of baby boomers [64 percent] and Generation X workers [70 percent] think work in retirement will be a source of retirement income, signaling a plan not to rely solely on savings and retirement accounts.
The report showed that 29.5 percent of baby boomers and 31 percent of Gen-Xers will rely on work in retirement as a major source of income.
“I think the landscape of retiring is changing a lot faster than we think,” said Malcolm Makin, president of Professional Planning Group in Westerly. “I’m talking to people who say they don’t know if they’ll ever retire at all. Those [clients] who have the ability will continue to do what they do as long as they continue to think and perform well.”
Makin is past the standard retirement age and still working, though he says his motivation is the enjoyment his work brings.
He said about 97 percent of his client roster is comprised of those who are either retired or hoping to retire soon and that his decades of professional experience have seen much change in regards to the economics of retirement planning.
The trouble began, he said, when the tech bubble burst around 2000 and then was made much worse by the economic downturn of 2008.
Suddenly, he said, people who once planned to retire as early as possible saw companies shift their pension plans, their real estate values dramatically decrease and their anxiety about post-retirement financial security surge.
He likens what workers now face to what road-trippers encounter on a long drive. Start out with your gas tank less than full, he said, and you can’t go as far.
In the IRI report, 38 percent of workers 50 and older reported they had an interest in phased retirement and 27 percent of workers would delay retirement due to current economic conditions.
“[Some clients] just have a natural concern and a little bit of that is probably media driven and some people are still feeling the shock of 2008,” Forbes said. “[People] have this innate fear that they need to save more and have more money set aside before they can really, really retire.”
His clients have taken to a variety of part-time work in their retirement years, including retail positions at Home Depot stores, at golf courses in Florida or continuing their line of work on a contract basis.
Stephen Poplaski, who has owned Lighthouse Financial Management in Westerly since 1999, said between 75 percent and 90 percent of his clients are between 55 and 75 years old.
Recently, he met with a client, a medical professional, who is 66 and has so far delayed retirement from the desired age of 62.
That client wanted to transition their medical practice over to someone else rather than leave completely and to ensure financial security.
“We’ve had some volatility in the market the last few years, so folks are hesitant to pull the plug and go into full-time retirement,” Poplaski said. “I’ve never had a client say they had too much money in retirement. But the opposite has been true.” •
