Half of Pre-Retirees Expect to Return to Work

Their primary reasons are financial and to fight boredom

Fifty-three percent of workers who expect to retire in the next five years think it is likely they will return to work, according to a survey by Home Instead, Inc.

Earning additional income was their primary reason for returning to work, cited by 67%, followed by fighting boredom (44%) and keeping their minds sharp (22%). Sixty-eight percent of those approaching retirement say they plan to work in a different industry, and 65% of retirees who have returned to work say the same.

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“Today, more aging men and women are redefining what their next chapter looks like, seeking out new career opportunities that serve their skills, passions and life goals,” says Jeff Huber, president and CEO of Home Instead, Inc. “We are seeing the desire among seniors for a second career to not just fulfill a monetary need but source of personal fulfillment later in life. In fact, many of our professional caregivers are seniors themselves.”

Nearly 80% of those nearing retirement or who have retired and returned to work say they would like to make a meaningful impact in their communities in their post-retirement years, such as through volunteering, caregiving, teaching or giving back.

Catherine Collinson, CEO of the Transamerica Center for Retirement Studies, says that with people living longer, retiring at age 65 is an outdated hallmark.

“With Boomers blazing the way, full retirement is no longer a point in time,” Collinson says. “The transition could be a decade or more and involve shifting gears and working in a different capacity or finding a flexible arrangement, all with more time for family.”

Home Instead, Inc. says that some of the most popular jobs for retirees are retail sales clerks, bank tellers, online tutoring and caregiving.

401(k) Participants Mostly Stayed Put in Investments in July

Among those who did trade, the majority put assets into fixed income vehicles.

July was a particularly slow month for trading in 401(k) plans, with no days of above-normal trading activity, according to the Alight Solutions 401(k) Index. This was the first month of no days of above-normal trading activity since June 2017 and continues the lull in trading, with only one day of above-normal trading in both May and June.

Thirteen of 21 days favored fixed income, and, on average, 0.014% of balances were traded each day. Throughout the entire month, participants transferred a total of 0.15% of their balances. Year-to-date, they have transferred a total of 0.80% of their balances.

The number of days when participants transferred money into fixed income funds in July totaled 13, or 62% of the trades. Year-to-date, they have transferred money into fixed income funds on 80 days, representing 55% of the trades. The number of days when participants transferred money into equity funds totaled eight, or 38% of the trades. Year-to-date, they have transferred money into equity funds 66 days, representing 45% of the trades.

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Inflows went primarily into stable value (53%), mid U.S. equity (22%) and money market funds (15%), with money coming out of company stock (27%), target-date funds (26%) and emerging markets funds (14%).

At the end of July, participants had an average of 68.9% of their portfolios invested in equities, up slightly from 68.5% in June. New contributions in July matched those in June, with 68.1% invested in equities.

The three top asset classes with the largest percentage of total balances were target-date funds (28%), large U.S. equity funds (25%) and stable value funds (10%). Asset classes with the most contributions in July were target-date funds (46%), large U.S. equity funds (20%) and international funds (8%).

Domestic and international equities had positive market returns in July, with both large U.S. equities and small U.S. equities up 1.7%. International equities were up 2.3% and U.S. bonds were virtually unchanged, with a 0.1% gain.

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