What’s the ideal retirement age? For many of us growing up the answer used to be 65. That’s when many of our dads finally hung up their briefcases or tool belts and decided it was time to start enjoying that well-earned pension. These days for most Baby Boomers the answer is 66 (and those pensions have largely become a thing of the past). For those Boomers born in 1954 or earlier, 66 is the age when full Social Security benefits kick in, so that’s the age we tend to think of as “retirement age.”
But according to this recent article published on the financial website Motley Fool, “More and more Americans are embracing the new reality of retiring at 70 – or later.” In spite of the fact that the average retirement age in America remains low at age 63 (a figure probably affected by the Great Recession which forced many seniors out of the workplace earlier than planned), “a growing number of Americans may have to wait even longer to make their grand exit from the workforce,” says the Motley Fool article. It quotes a study that shows almost a quarter of Americans believe they will not be able to retire until 70 years old or later, and 5% of respondents doubt they will ever be able to retire at all. Even among workers who say they would like to retire in their mid-60’s, there’s a significant amount of doubt they’ll be able to.
The biggest reason for the delayed retirement, says the article, is financial – specifically a serious lack of savings. Social Security is designed to replace 40% of a beneficiary’s pre-retirement income, so personal retirement savings is essential to preserve a retiree’s lifestyle. “Yet,” says Motley Fool, “an almost frightening one-third of Americans, many of whom are 55 and over, admit to having absolutely no retirement savings whatsoever.”
In an ideal world, working more years can be a real benefit to a man or woman in their late 60’s. Surveys show that remaining on the job not only brings financial benefits but also helps keep us physically strong, mentally sharp and socially engaged. Studies have also demonstrated that older workers are a terrific asset in the workplace. (Click here to read a recent article from the AgingOptions Blog explaining how working longer keeps you healthier.) The trouble, says the Motley Fool, is that a significant number of those who anticipate retiring after 70 – a full 40% — are also experiencing higher than average stress levels on the job, and an equal percentage report that they feel “stuck in their jobs.” This is hardly a recipe for on-the-job joy and enthusiasm.
From a financial standpoint, the benefits of continued employment are clear and irrefutable. First, you’re earning a salary, so you can keep from dipping into your savings. Second, you probably have employee-supported health coverage which is generally a huge benefit. Third, even if you haven’t saved enough to retire, with some discipline and a good plan you can add to your savings as you keep working and make your nest egg just a bit more robust. The longer you work, the fewer years you’ll actually spend retired, stretching your savings farther. It may also be to your advantage, depending on your circumstances, to delay taking Social Security benefits, since your check will grow each year you wait until benefits reach their maximum at age 70. (Those higher benefits can also boost your spouse’s benefits, depending on your circumstances.)
Where are you in the retirement planning process? Are you confident that you have enough saved, so that your chief concern is protection of your assets in retirement? Or are you like so many concerned that your savings just aren’t sufficient to allow you to retire when and how you want to? No matter what your situation, one thing is absolutely certain: you need professional advice. Here at AgingOptions, providing that advice – thorough, honest, and objective – is our specialty. We will walk alongside you in the process of creating a personalized retirement plan, called a LifePlan, that will help transform your retirement plans from vague dreams into tangible reality.
Your LifePlan will answer the key questions that a comprehensive plan should address. How will I plan for my financial needs? How will I cover my medical expenses? What legal documents must I prepare? How can I choose the best housing option for myself and my spouse? What’s the best way to communicate my wishes to my family? All of these and more become part of your LifePlan. It truly is a revolutionary approach to the process of preparing for a secure and fruitful retirement future! Find out more by attending an upcoming LifePlanning Seminar, offered at no charge, where all your questions will be answered. For dates, times and online registration, click on the Upcoming Events tab, or contact us by phone. It will be a pleasure working with you – no matter when you plan to retire! We’ll look forward to meeting you soon.
(originally reported at www.fool.com)