More than one-third of pre-retirees over age 45 do not expect to be able to retire, an increase of 6% over the number reported in 2009. That pessimistic view comes from the latest survey by the Society of Actuaries, "2011 Risks and Process of Retirement Survey Report." The society surveyed 1,600 people over the age of 45, including 800 retirees and 800 pre-retirees.

Of those who do not expect to retire, 45% say it is because they lack the financial resources to do so. Of those with financial concerns, three-quarters of retirees and 87% of pre-retirees say they will need extra income. Fifty-nine percent of retirees and 80% of pre-retirees say they need to build more assets. And 33% of retirees and 61% of pre-retirees say they need to keep employee benefits.

"Current trends in retirement indicate that people may need to work longer than they originally planned," says actuary and retirement expert Carol Bogosian, spokesperson for the Society of Actuaries.
"Individuals often have a difficult time estimating how long they can expect to live, how much they will earn on their investments and how much they can spend each year to avoid running out of money," she adds. "In fact, many people are just guessing about how much money they will need in retirement."

The majority of both pre-retirees (89%) and retirees (77%) also say staying active is a reason to keep working in retirement. However, those who do expect to retire often overestimate the amount of time they will be able to keep working. While half of retirees report they retired before age 60, just one in 10 pre-retirees think they will retire that early. Half of pre-retirees expect to work until at least age 65.

"There is a big gap in the age at which pre-retirees expect to retire and actual retirement ages of those who have retired," says Bogosian. "This may be partially due to involuntary retirement and health problems. This gap, together with the failure of many people to plan for a long enough retirement period, may indicate significant future financial problems for many."

For those retirees who have continued working, half have found employment with a company other than the one they retired from, while 29% have continued to work for the same company. Twenty-two percent have started their own small businesses or become self-employed. Thirty-one percent of pre-retirees who plan to retire say they will also start a small business.

--Karen DeMasters