Arecently released survey suggests that although many Americans may want to work a few years longer to improve their retirement security, their health might prevent them from doing so.

Nearly three out of five retirees say they retired earlier than they expected, according to a survey of retirees and preretirees conducted by Bank of America Merrill Lynch. Just one in nine pre-retirees, meanwhile, is completely confident in their ability to pay for their health care expenses in retirement.

"The No. 1 retirement wild card that came out was health disruption. ... there are some very big worries out there," said David Tyrie, head of personal wealth and retirement for Bank of America Merrill Lynch. "When you look at this health disruption, it really is a triple whammy for them. It's unpredictable, it's very expensive and it's the biggest reason folks are retiring early."

Beyond core financial advice, both retirees and preretirees cited "help sorting through health care and long-term care options," as being most valuable (75%).

"You have a boomer generation that's living 30 years longer; their biggest concerns are health care. They're saying they need to start thinking about contingencies," said Tyrie. "It's not just about a number or saving for one task. They have to factor in this contingency. Most people have not thought that through, and they're starting to come to the realization that this [health care] does factor into their retirement."

For employers, he said, this means taking a more holistic view of preparing employees for retirement. "Employers have done a nice job providing savings programs for employees because we need to make sure employees are saving," he said. "What employers now need to turn to is the fact they have another challenge ahead of them for the boomers, which is to be more holistic about this and not just about the number - how much did you save - but also about the [health care] contingency."

The study surveyed more than 6,300 Americans age 45 and older, and compares preretirees' vision of retirement to current retirees' real-life experience. Findings were compiled in the report Americans' Perspectives on New Retirement Realities and the Longevity Bonus.

"We're finding some interesting changes in terms of what preretirees expect retirement to be about versus what those already in retirement are really living and experiencing," said Andy Sieg, head of global wealth and retirement solutions for Bank of America Merrill Lynch.

For example, preretirees think they will most miss the reliable income of a regular job, but current retirees actually miss the social connections offered through work more than the reliable income.

"This underscores the need to have a much broader, balanced view of all the things that make up a full and satisfying life in retirement," said Sieg.

Many of those surveyed now view retirement as an opportunity for career reinvention, with 51% of preretirees saying they will seek a different line of work in retirement.

"The idea of working a few extra years, cycling between work and leisure, has gone from being an outlier to being a core assumption in terms of how preretirees expect to spend their later lives," said Sieg. "They're doing this both for the additional earning power but even more, we think, for the stimulation and satisfaction that comes from work."

He believes organizations are waking up to the opportunity that "older workers are such a powerhouse of knowledge and skills, and for us, as a country, to be able to better leverage this talent to be able to drive economic growth ... is unleasing potiental human capital in a way few other economies around the world can do."

When it comes to financial goals, meanwhile, achieving peace of mind is seven times more important than accumulating wealth (88% vs. 12%.) "Peace of mind has become a far more powerful driver than simply wealth creation on its own," said Sieg.

When asked what is most important to pass on to future generations, respondents indicated their top priorities are values and life lessons (74%), which are viewed as more than twice as important as financial and real estate assets (32%).

Fifty-two percent of parents, meanwhile, expect to provide their adult-age children with some sort of ongoing support - be it financial, health care, housing or education - and 35% believe they will need to support their grandchildren in such ways.



Retirement peace of mind

On a scale of one to 10, the national retirement peace of mind index was 5.3 at the time the survey was conducted. The index was calculated based on responses to the following questions:

1. I feel content and comfortable about how I will spend my retirement years.

2. I have many worries about what might happen during my retirement.

3. Thinking about my retirement gives me feelings of security and stability.

4. I feel anxious and uneasy about how I will support myself and my family during retirement.

5. I feel well-prepared for whatever may happen during my retirement.

"The big change here is from a world of accumulation to the world of actually living in retirement," said Tyrie.

"When you look at this, what you notice right away are the insecurities, and the concerns and the worries are around the complexity of what they're dealing with."

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