Tag Archive | "postponing retirement a reality for many"

Working Longer May Not Save Your Retirement


Working longer is a frequently-sited strategy for ensuring a financially secure retirement and it offers many benefits such as more years of employment to save and maximizing your Social Security benefits. But just working longer may not save your retirement.

Working longer may not save your retirement, but it may help make your  golden years more fun, interesting — and rewarding.

Working longer may not save your retirement

There are many other factors that come into play when you consider postponing your retirement. How much you’re earning now is critical.

As you might expect, projections for the lowest pre-retirement income quartile are the most sobering. This group would need to defer retirement to age 84 before 90 percent of them would have even a 50 percent probability of achieving comparable pre-retirement living standards.

You’ll have to really love what you do to make working until you’re 84 seem attractive. The future looks brighter for those earning more, but not much.

The results improve with income levels, but even among those in the highest income quartile, 90 percent have only a 50 percent chance of having enough to retire by 70.

Even if you’re relatively young and plan to work longer, the projections are still grim.

When broken out by age, the news isn’t much better: For one-third of households in which the people were between ages 30 and 59 as of 2007, working until age 70 won’t provide adequate income in retirement.

One way to look at this and make the picture seem a little brighter is to broaden your definition of “work.” Even if you hate your current job and want to get out of it as soon as possible, your skills and experience may have many applications that will allow you to work less, generate income to offset your retirement expenses, and actually enjoy what you’re doing.

Working longer may not save your retirement, but it may help make your  golden years more fun, interesting — and rewarding.

Click here to learn why working longer may not save your retirement.

Posted in Planning for Your Retirement, Retirement Plan Challenges, Saving for Retirement, The EconomyComments (0)

Postponing Retirement – It’s Worse Than We Thought


If you’re like most Americans nearing retirement age, the future does not look promising. Millions of us who expected to enjoy our “golden years” in security are staring down the barrel of a financial gun. But, if you thought it was just the average working stiff that would never be able to retire, you’re wrong. When the rich are postponing retirement — it’s worse than we thought.

Postponing retirement — it’s worse than we thought

According to a recent survey conducted by Bank of America’s Merrill Edge:

Even with investment accounts having recovered much of their lost ground, so-called “mass affluent” people with between $50,000 and $250,000 to invest don’t think they have enough to retire when they had originally planned to. Of those surveyed, 56% said that they expect to retire later now than they thought a year ago, with only 7% expecting to retire earlier. That’s a big shift even from a couple of years ago, when only 42% were revising their retirement age upward.

And we all share many of the same concerns.

The things that wealthier Americans are worrying about mirror the concerns of the overall population. Affordable health care remains the primary concern, as costs continue to move higher. With other surveys estimating that the typical retiree will spend $240,000 on health care over the course of his or her retirement for out-of-pocket costs, that concern is quite justified. Few have the financial resources necessary to fund potential health care needs as well as other basic necessities, let alone the lifestyle they’d prefer to lead after they leave their careers for good.

Is it hopeless? I don’t think so, but it will take a lot of work — and a shift in our expectations — if we want to enjoy retirement.

From a personal finance standpoint, the good news is that Americans of means aren’t content to sit idly by and hope for the best. Rather, they’re taking steps to boost their personal accountability by managing their investments more actively.

Don’t sit idly by and hope for the best. Take steps to boost your personal accountability and manage your investments more actively. We may have to postpone retirement — but it doesn’t have to be worse than we thought!

Click here to read more about postponing retirement.

Posted in Creating a Personalized Retirement Plan, Planning for Your Retirement, Retirement Plan Challenges, Saving for RetirementComments (0)

The Longer You Work, The Better Your Retirement Can Be


Many older Americans are in the dog house when it comes to having enough for a financially secure retirement. Given that, there’s hope: the longer you work, the better your retirement can be.

The longer you work, the better your retirement can be

I know. The idea of working past your “official” retirement age is not a pleasant thought, especially if you’ve spent most of your career in a job you don’t like. But what if you had a job you really enjoy? One that challenges you every day? One that rewards you for being older and wiser than those young Gen X and Gen Y whippersnappers? It could happen — and you can make it happen.

Plan now to follow your passion instead of retiring.

Here’s a look at each of five job categories with a high demand for retirees:

Health Care

Home health aide and personal aide top a Bureau of Labor Statistics list of job fields expected to grow the fastest by 2018. The pay is modest, with median wages of roughly $20,000 for each in 2008. But caregiving work can be a good fit for those looking to work 20 to 25 hours a week and do something meaningful.

Retail

Many retailers welcome seniors as customer service employees or cashiers because they have found that older workers are very good at making customers happy, according to Coleman. Other retail jobs available for seniors may include retail manager, floor supervisor, stock-room associate, greeter or food company demonstration worker.

Government

Two government agencies in particular — the Department of Veterans Affairs and the Transportation Security Administration — are known for seeking older workers. Both agencies have openings requiring little or no experience.

Computers/Technology

One of the most popular profession switches for older workers and retirees is going into computer-related work, according to Jim Toedtman, editor of the AARP Bulletin. The jobs entail such tasks as data entry or working with data communication systems and networks.

 Temp Work

Like seasonal retail work, temporary help in an office or elsewhere can be an ideal match for an older worker and employer. The worker offers flexible hours and experience and gets the opportunity for new challenges and limited-term working assignments that sometimes lead to full-time positions.

Some of these options may be just right for you — or they may not — but you get the idea. Start planning now to pursue your passion — and even make some money doing it! The longer you work, the better your retirement can be.

Click here to read more about work opportunities for retirees.

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Middle Class Americans are on the Edge of a Retirement Cliff


Nearly all Americans are pessimistic about their retirement years — and with good reason. A recent survey of 1,000 people conducted by Harris Interactive for Wells Fargo quantified the bad news, revealing that middle class Americans are on the edge of a retirement cliff.

Middle Class Americans are on the Edge of a Retirement Cliff

According to the survey:

  • 53% are not confident they will have enough money saved for the retirement lifestyle they want.
  • 30% expect they will have to work until at least 80 to have a comfortable retirement lifestyle.
  • 73% believe their employers do not want them to work in their 80s.
  • 70% of middle class Americans expect to work during retirement.
  • 39% believe they will have to work out of financial necessity.

By any objective standard, it’s clear the American Dream, whatever you believe that to be, has been replaced by the Retirement Nightmare.

Joe Ready, director of Wells Fargo Institutional Retirement and Trust observed:

It is so tough for Americans to save for retirement, and we feel it is very important to keep shining the light on this issue. People say they’ll work longer, but how possible will this be for millions of Americans? Preparing for retirement can’t be kicked down the road because the other picture that is emerging is how many people will live very close to the poverty line in retirement. We’ve got to marshal our resources as a country, an industry and as individuals to deal with the issues creating this cliff.

An ironic statement, given that financial institutions like Wells Fargo are, in a large part, responsible for the devastating economic crisis that faces us and are perpetuating the situation by promoting retirement plans and investments that siphon money out of the middle class and into those institutions’ bottom line profits.

Middle class Americans say they will need a median of $300,000 to support them in retirement, but to date, have only saved $25,000 (median). When asked what percentage of their nest egg they expect to withdraw annually in retirement, the median withdrawal predicted by middle class Americans is 10%. Many experts say withdrawals should be maintained at three to four percent.

That’s a huge gap to cover, especially if you’re already in your 50s — or even worse, 60s. Savings accounts and CDs return almost nothing and result — at best — in a slower, safer loss of your money. 401(k) plans are proving to be disastrous for many reasons. Middle class Americans are on the edge of a retirement cliff. Now what are we going to do about it?

Click here to read the Wells Fargo press release presenting their findings

 

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Postponing Retirement Has Become a Reality for Many


Over the last few years, many Americans, especially low- and middle-income workers, have watched their retirement dreams vanish like dew in the hot morning sun. Home values have plummeted and many retirement funds have lost fifty percent of their value — or more, meaning postponing retirement has become a reality for many.

While we do seem to be coming out of the “Great Recession” — corporate profits are up, housing prices seem to have bottomed out in most areas, and the economy is slowly adding new jobs — it will be quite a while before we’re back to where we were. And that’s bad news, especially for those in the 55 to 64 age bracket, many of whom will now have to work to 70 and beyond to meet their needs.

Retirement Roadblocks Mount for Many

Denise McColister, of Dallas, had hoped to retire at 62.

“At 45, I felt really secure,” the Dallas resident, now 55, recalled. Back then, her husband made good money, and their house was paid for.

Then he became disabled and their house, which they had borrowed against, plummeted in value. Now, instead of padding her financial cushion, she’s working a part-time call center job while hoping for a better position. There’s no retirement in sight.

“I’ll probably be working until I’m called home,” she said.

Working until 70 to maximize your Social Security benefits, which max out at that age, is one option. Downsizing now, to reduce expenses and maximize contributions to your retirement plan is another.

Unfortunately, there are no easy answers. We’ll be recovering from this devastating financial meltdown for a long time to come and postponing retirement has become a reality for many.

Click here to read Retirement Roadblocks Mount for Many posted by Evan Bedard on October 1, 2012 in Latest Financial News

Posted in Planning for Your Retirement, The EconomyComments (0)


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