Aging Options

If Working Past Retirement Age is Part of Your Financial Strategy, You May Have to Think Again

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Many of those who are boomers and older remember when our parents retired. The common pattern a generation or two ago was that dad (typically the chief breadwinner) hit the magical age of 65 and retired on a company pension. Things have certainly changed. Not only are far fewer workers retiring with a pension, but now it’s common for employees to say they plan to keep working well past so-called “retirement age,” some because they choose to but most because they have to.

The Best-Laid Plans

At least, that’s the plan. However, it has become increasingly clear that many current retirees who are counting on post-retirement age income to help pay the bills are going to be disappointed. That’s the conclusion from this article we just discovered on the Reuters news website. We’ve read articles like this before, and we’ve written about this predicament here on the AgingOptions blog.  The title of the Reuters article conveys the message very succinctly: “Working in retirement,” it warns, “is not a sure thing.”

The article profiles a man who had worked for the same firm for 30 years. When he was 58, his company merged with another, and this man faced sudden, unplanned unemployment. As a result, says Reuters, “[His] plans for a cozy retirement were shot.”  Now 71, this man “discovered what many younger people should know if they are counting on working into their late 60s to make up for a lack of retirement savings: ‘People are dreaming if they think they’re going to work until they drop,’ he said.” The problem, says the Reuters analysis, is that staying on the job indefinitely is precisely the plan for many boomers who fear (justifiably) that their retirement savings are inadequate. The Employee Benefit Research Institute reports that nearly eight out of ten workers are expecting to work well into their retirement years – seemingly oblivious to the odds stacked against them.

A Huge Disconnect

As Reuters puts it, “There is a huge disconnect between the plan to work and what happens. Although most people now say they want to work into their retirement years, only 29 percent of current retirees are actually doing it.” The EBRI survey further states that fully half of current retirees actually stopped regular employment before age 62, often forced out by job troubles or poor health – either their own or their spouse’s. More than  half of people who retired earlier than planned say they did so because their spouse developed health problems that required them to become a primary caregiver. As for those older workers facing layoffs, their odds of finding a new job are depressingly bleak: the Center for Retirement Research at Boston College says that 60 percent of older workers who lose their jobs end up retiring early because they can’t find new employment.

If retirement is still some years away, knowing that your work plans may be subject to change should prompt you to adjust your savings. “If you are setting your savings goal based on working until a certain age, get more conservative about your planning,” the Reuters article advises. “About half of people are not going to have enough saved to keep up their lifestyle when they retire, and that assumes they keep working and saving during the years all the way until 65, according the Center for Retirement Research.” If your savings regimen is built on that model, now would be a good time to sit down with a qualified, objective financial planner and see what it would take to scrimp now and save more, just in case you fall victim to unplanned job loss later in your life.

The Perks of Work

People often pretend to have a love-hate relationship with their work and the stress that goes with it. “I owe, I owe, so off to work I go,” says the familiar ditty. But if you ask someone who has lost his or her job and can’t get another one, you hear a much different story. Full-time employment gives workers, especially men, a sense of purpose. It provides a social circle. The workplace creates mental stimulation, even if your job is more or less mundane. Then, of course, there are the obvious benefits of a regular paycheck and (usually) medical insurance, a cost that some people who plan to retire early can overlook. The man spotlighted in the Reuters article ended up paying about $15,000 per year for health care insurance for himself and his wife until he finally qualified for Medicare. When that date arrived, he said, “I felt I had died and gone to heaven!”

In our experience at AgingOptions, there’s no magic bullet or potion that will protect you from unplanned job loss. But our strong recommendation, based on many years of experience talking with thousands of people facing retirement, is that a comprehensive retirement plan can definitely help you take all the contingences into account, so that you’re better prepared, no matter what the future may bring. This type of planning not only prepares you financially, but it also deals with the other critical facets of retirement: housing contingencies, medical coverage, legal protection and even family dynamics. This kind of planning is called LifePlanning, and only AgingOptions offers it.

We invite you to find out more about this breakthrough in retirement planning by joining Rajiv Nagaich at an upcoming LifePlanning Seminar. These information-packed sessions are absolutely free – and you’ll come away with a clear understanding of what your next steps should be.  We offer these popular seminars in locations throughout the Puget Sound area. Visit our Live Events page for a calendar of upcoming seminars – then register for the event of your choice. Don’t trust your retirement to chance! Take action now and join Rajiv at a seminar soon. We’ll look forward to seeing you there!

(originally reported at

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