Work Never Ends

Even the rich aren’t immune to the recent trend of people working well into their retirement years.

In fact, wealthy people are twice as likely to continue working past retirement than those with more modest savings, according to a Merrill Lynch survey.
Financial advisors say this isn’t as surprising as it may seem. The same attributes that make a person successful and wealthy, they say, are the characteristics that make them want to keep working past the traditional retirement age.

“The wealthy people who are working in retirement are often those people who have become successful in the first place because they love what they do,” says Eric Thorne, senior vice president at Bryn Mawr Trust, a wealth management and investment firm based in Bryn Mawr, Pa.

Advisors also say the concept of retirement has changed drastically and is being redefined by baby boomers; it no longer means a time when someone stops working.

Fifteen percent of retirees with $250,000 or less are still working during what would be considered retirement years, according to the Merrill Lynch retirement study released in June.

In comparison, 33% of retirees with $1 million to $5 million in assets and 29% of those with $5 million or more are still working. The survey included responses from more than 7,000 individuals.

The survey indicated that rich retirees are more likely to work because they want to, rather than because they have to, and that they are more likely to be working for themselves in retirement.

“These people do not feel like they are working and they cannot imagine life without a job,” Thorne says. “They are still committed to growing their businesses even though they could retire.”

Thorne also notes there’s a psychological aspect to working past retirement:  Some wealthy people continue to work because they are constantly worried about running out of money, no matter how much they have.

“The idea of having their income stream cut off is scary to them,” he says.

 But he advises such clients that if they don’t like the work they are doing in retirement, they should stop. They will never run out of money based on their current lifestyle, no matter how long they live.