Planning To Work In Retirement? Not So Fast

For most folks, saving money is difficult. Bills start piling up and new expenses seem to crop up out of nowhere. This has led frustrated workers to give up the idea of retirement altogether.

But if you’ve neglected your 401(k) or IRA, thinking you’ll simply work forever… think again. Because you’re in for a rude awakening.

Turns out the longevity of your career isn’t actually your choice. And today’s employers – in nearly every industry – are making that crystal clear. Get Steve McDonald’s two cents on the matter in today’s Two-Minute Retirement Solution.

Transcript:

Today’s Two-Minute Retirement Solution is focused on a rather unsettling, very real dilemma. The baby boomers have finally realized that they have done a terrible job of preparing for retirement.

A common reaction has been increased interest in delaying retirement. And an increasing number of folks are now planning to work until at least age 70 in order to maximize their Social Security benefits.

With good reason! You get about 30% more money at age 70 compared to the amount received at 66, the current “full retirement age.”

And a large percentage of folks also plan to supplement their incomes by working in retirement.

Well, get ready, because there’s a major wrench in those plans.

According to the results of a recent Transamerica study, you can’t count on working in retirement to supplement your income. You can’t even count on working until you turn 70.

Because the decision is not up to you.

Some 51% of boomers plan to work, in some capacity, during retirement. But only 6% actually do.

Why? Well, three out of five end up leaving the workforce earlier than they had planned.

Of those, 66% lose their jobs due to employment issues, organizational changes, buyouts, or getting fired or laid off.

Only 33% leave early for health reasons, either their own or a loved one’s.

Considering just how little many of us have saved for retirement, this isn’t good news. Just working until 70 will be a challenge.

In the back of my mind, I have always wondered how we would be able to keep our jobs for years after hitting the normal retirement age – especially considering the condition of the job market since the 2008 debacle.

It just never made any sense. And now the numbers are proving that it actually doesn’t make sense.

The only solution is to save as much money as possible while you can afford to do so. I know that’s tough to do, but the way things are unfolding leaves us with fewer choices.

Twenty to 30 years of unemployment is no joke. If you aren’t taking the retirement funding shortfall seriously, you’d better change your thinking. Soon.

Good investing,

Steve