From Yahoo Finance
Why 'I'll just work longer' is not a good retirement plan
By Mandi Woodruff
Despite his age, Charles Morris, 66, says he has no plans to retire anytime soon. The Beaverton, Ore., web developer is one of many older Americans today who are changing the retirement landscape as we know it.
Three out of four workers in the U.S. plan on working at least part time after they hit retirement age, according to a recent study by Merrill Lynch.
For pre-retirees (those over 55), the top reason cited for putting off retirement should come as no surprise: money. Not only are Americans living longer today, but fixed costs like health care and housing continue to outpace inflation. For cash-strapped workers, clocking in for a few more years may seem like the only reasonable solution to solving their financial anxieties.
“Frankly, my continuing to work is all about my wife, to ensure she will have the funds needed to sustain her if I pass away first,” Morris says. “We have been married 46 years and my wife has been primarily a stay-at-home mom” of six children. He currently contributes 40% of his salary to his 401(k). What’s left over after expenses goes into a cash reserve he and his wife use as an emergency fund.
Workers like Morris, who plan to work longer to bolster their nest egg, may be more common today. But so far they are still the exception, not the rule.
“One of the cornerstones of [retirement] planning is to always expect the worst,” says Wendy Weaver, a certified financial planner in Bethesda, Md. “Attitudes about working past retirement have changed a great deal, but the bottom line is you still don’t see many people working at age 75 and 80.”
In a 2014 Employee Benefit Research Institute report, researchers found half of retirees wound up leaving the workforce far sooner than they expected.
Only 9% of workers said they plan to retire before age 60 but nearly four times as many (35%) wound up actually retiring that early, according to the report. And just 18% of workers said they’ll retire before age 65, but again, far more people found themselves retiring in that age range than expected (32%).
And people over the age of 65 make up only 5.4% of the working population in the U.S.
Read more from Yahoo Finance >>
Why 'I'll just work longer' is not a good retirement plan
By Mandi Woodruff
Despite his age, Charles Morris, 66, says he has no plans to retire anytime soon. The Beaverton, Ore., web developer is one of many older Americans today who are changing the retirement landscape as we know it.
Three out of four workers in the U.S. plan on working at least part time after they hit retirement age, according to a recent study by Merrill Lynch.
For pre-retirees (those over 55), the top reason cited for putting off retirement should come as no surprise: money. Not only are Americans living longer today, but fixed costs like health care and housing continue to outpace inflation. For cash-strapped workers, clocking in for a few more years may seem like the only reasonable solution to solving their financial anxieties.
“Frankly, my continuing to work is all about my wife, to ensure she will have the funds needed to sustain her if I pass away first,” Morris says. “We have been married 46 years and my wife has been primarily a stay-at-home mom” of six children. He currently contributes 40% of his salary to his 401(k). What’s left over after expenses goes into a cash reserve he and his wife use as an emergency fund.
Workers like Morris, who plan to work longer to bolster their nest egg, may be more common today. But so far they are still the exception, not the rule.
“One of the cornerstones of [retirement] planning is to always expect the worst,” says Wendy Weaver, a certified financial planner in Bethesda, Md. “Attitudes about working past retirement have changed a great deal, but the bottom line is you still don’t see many people working at age 75 and 80.”
In a 2014 Employee Benefit Research Institute report, researchers found half of retirees wound up leaving the workforce far sooner than they expected.
Only 9% of workers said they plan to retire before age 60 but nearly four times as many (35%) wound up actually retiring that early, according to the report. And just 18% of workers said they’ll retire before age 65, but again, far more people found themselves retiring in that age range than expected (32%).
And people over the age of 65 make up only 5.4% of the working population in the U.S.
Read more from Yahoo Finance >>
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