No retirement savings? Thinking you’ll just work longer? Think again.


Washington Post, March 19, 2018

You know you need to save for retirement, but so many other things are getting in the way — kids, a mortgage, the vacations to take to stay sane. March Madness. Maybe you should buy a better television to watch the NCAA basketball tournament.

And if you can’t save, no problem. You just won’t retire, right?

Your backup retirement savings plan is to work longer, maybe well into your 70s.

For many people, 65 is just a number. It’s certainly not retirement age.

“Nearly 20 percent of people age 65 plus are still working full or part-time — the highest rate since 1962,” Trent Gillies writes for CNBC. “After the end of the Great Recession, more seniors were forced to stay in the workforce longer, in order to make ends meet.”

A shocking number of workers — 79 percent — expect to supplement their retirement income by getting a job, according to the Employee Benefit Research Institute (EBRI).

Just one problem if this is your retirement plan: What if you can’t work?

Yes, more seniors are staying in the workforce past 65 and happily so. But many others are finding themselves in a retirement quandary. They thought they had more time, but the reality is they are forced to retire.

And why can’t they keep working? Among the reasons, experts say, are health problems, layoffs, age discrimination and caregiving needs.

“When surveyed, 61 percent of Americans say they retired sooner than they’d planned,” according to a report by Ben Steverman in Bloomberg News. “That’s more than anywhere else in the world, according to the 2017 Aegon Retirement Readiness Survey, of 16,000 people in 15 countries. Globally, 39 percent of retirees say they quit working early. Even part-time work may be unrealistic. EBRI finds that just 29 percent of retirees say they worked for pay at some point in their retirement. …

“The irony is, those seniors who find it easiest to keep working — healthy, well-educated and highly skilled people who enjoy their jobs — tend to be the least likely to need the money,” according to Steverman. “Other older Americans, faced with few good job choices, often just decide to retire and live frugally off Social Security and savings.”

Personally, I’m hearing from a lot of people who had intended to work past 65 to give them more time to save, but they complain they’re being pushed out of their jobs because of age. They are hitting the “gray ceiling.”

“Even though employers aren’t supposed to discriminate based on how old you are, getting hired can be a challenge when you’re considered an ‘older worker,’ ” wrote Alison Doyle for the Balance. “In addition to being considered ‘old,’ experienced candidates are sometimes considered to be more of an expense (higher salary, pension, benefits costs, etc.) than a younger applicant would be.”

Sure, life — your needs and wants — can get in the way of saving. But when it comes to retirement, reality may derail your backup plan. You may find you can’t work to fill your savings gap.

Read more here.

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