Plan for Retirement Even If You Are Not Planning to Retire
If you are one of those people who decided to solve the problem of retirement by “working as long as possible”, it is high time to ask yourself what could happen if your working days end earlier than expected.
As reported by the New York Times:
Many Americans understand that longer jobs can be a good way to improve retirement benefits. According to the Employee Benefit Research Institute , 33 percent of workers expect to retire between the ages of 65 and 69, and 34 percent expect to retire at the age of 70 or older, or will not retire at all.
However, a recent study by the Center for Retirement Research at Boston College found that 37 percent of workers retired earlier than planned, and that the chances of success dropped as the goal became more ambitious. In this study, among 21 percent of workers who said they intend to work until age 66 or older, 55 percent were unable to achieve that goal.
In other words, are you able to work past the traditional retirement age, in essence, it all comes down to a coin toss.
Yes, there are many benefits to being able to make money between the ages of 60 and 70. For example, putting off Social Security until you’re done working is setting yourself up for bigger checks after retirement.
Likewise, the more money you make in later years, the more money you can invest in your day-to-day expenses, as well as travel, healthcare, and whatever else you might need or want in retirement.
However, there are many factors that can prevent you from reaching your planned retirement date. The New York Times reports that health problems and job loss are two of the main reasons people retire earlier than planned, and while you can work to maintain both your health and your career in older years, you cannot prevent unexpected diagnoses or downsizing.
What does this mean for you? Regardless of how old you are and how long you think (or hope) you can work, you need to plan for your retirement.
This can mean investing more money in retirement accounts – and remember, if you are over 50, the IRS allows you to make additional contributions.
It can also mean asking yourself what you will do if you (and / or your partner) do not have enough money to cover your basic needs after you stop working. Will you reduce the size? Move with a child or relative? Sharing a house with friends Golden Girls style?
It will also mean periodically re-evaluating your plans, whether you are 30 and need to adjust your retirement contributions after your child is born, or 60 who needs to change your retirement target date after an unexpected layoff. …
Because we will all stop working someday, even if we want to think that we will work as long as possible.
So start planning this date now.