Is Retirement Just Too Dang Risky?

I've been saving for retirement since my mid-20s, and I write a retirement-planning newsletter every month. Yet here's the thing: I don't plan to ever fully retire. And while most people list “retirement” as their number one investing goal, I don't think most other people should retire, either — at least not at age 64 for men and 62 for women, which are the average retirement ages these days, according to the Center for Retirement Research at Boston College.

I question the value and wisdom of retirement for financial reasons, for health reasons, and for “why should we encourage people to sit on their butts all day” reasons. However, in this post, I'll question retirement from a risk perspective: Can anyone really be sure that their savings and benefits will last for a few decades? Let's take a closer look.

1. Social Security has “issues.”
I've written before that all the talk of people getting nothing from Social Security is overblown; everyone will get something. But there are enough problems to suggest that younger and wealthier people should expect to get much less than their currently projected benefit. Not that the current benefits are enough to buy beachfront property; the average annual Social Security benefit is just $14,172. If that weren't scary enough, according to the Social Security Administration, more than half of elderly beneficiaries receive 50% or more of their incomes from Social Security; for 22% of married couples and 43% of unmarried beneficiaries, Social Security provides 90% or more of their incomes. The fact is, most Americans do not do a good job of planning for retirement.

2. Some people have pensions, but they have their own problems.
According to the Employee Benefit Research Institute, approximately 20% of the over-50 crowd receives income from a defined-benefit pension, with an average benefit of almost $18,000. However, the percentage of Americans who will receive a pension is shrinking. Plus, many of these plans don't have enough money to pay future benefits. (In fact, the massive underfunding of pension plans — particularly state and local plans — is one of the most underappreciated risks facing our country.) And when a company goes bankrupt, as retirees from Kodak recently learned, benefits can be reduced or eliminated. Most private plans are insured by the Pension Benefit Guaranty Corporation (PBGC), which has the power to take over underfunded plans or those of bankrupt or distressed companies. However, pensioners may not receive their full benefits. Furthermore, the PBGC is on the hook for $107 billion in payments yet has just $81 billion in assets. Government plans are not insured, but their sponsors can always raise taxes — though that's generally not very popular.

3. Savings to the rescue…or not.
I won't trot out all the stats about how people don't save enough, or how the baby boomers, as a group, are entering their golden years with too little gold (that is, net worth — I'm not suggesting that every retiree hoard the shiny metal). That's bad enough. My concern is that for these (often-too-meager) savings to last, investment markets have to cooperate, and, as we've seen over the past decade or so, they often don't. I'm not predicting Armageddon or anything like that; most of my longterm savings are in the stock market. But investing can be risky; we just don't know for sure how much a certain stock or even a bond will be worth a decade or two from now. Yes, you can play it safer with CDs or Treasuries, but only if your money will last as long as you do — and keep up with inflation — while earning 2%.

4. Or maybe my home equity will save me…oh, wait.

Several years ago, homeowners could take consolation in the rising value of their homes. Now, with prices down nationwide an average 30%, it's much more difficult to turn a nest into a nest egg. Of course, this wasn't supposed to happen. In 2005, Ben Bernanke, then an adviser to President Bush, said on CNBC, “We've never had a decline in housing prices on a nationwide basis. What I think is more likely is that house prices will slow, maybe stabilize…I don't think it's going to drive the economy too far from its full-employment path, though.” This just goes to show that even smart, well-connected people can get things very wrong, and that just because something hasn't happened before doesn't mean it can't happen.

5. Health care is unpredictable and expensive.
The big wild card in anyone's finances is health care — what illnesses or accidents will befall them, and how much of the costs will not be paid by insurance. Yes, most folks age 65 or older are eligible for Medicare, and approximately 25% of retirees also get help from former employers. But basic Medicare, by itself, does not provide comprehensive medical and dental care; that costs extra. Plus, the financial challenges facing the Medicare system dwarf any problems Social Security has. As for employer-provided retiree health care, that — like a pension — is a disappearing perk.

6. If I only knew when I'll die.
From a financial perspective, retirement is a mathematical equation that answers the question: Will I run out of money before I run out of life? You'll need a lot more money if you die a centenarian than if you die an octogenarian (which is how long the average person lasts, once she or he has made it to age 65). There are plenty of longevity calculators that will factor in your health, family history, and upholstery-potato habits to come up with an estimate of when you'll join that Great Spa in the Sky (I sure hope there are massages in heaven.). The standard financial-planning advice is that you should assume you'll live to 90 or 95. But the truth is, no one really knows their date of death, yet it's a very important variable in the calculus of retirement.

A caboodle of question marks
The bottom line is, no one can say for certain what their various sources of retirement income will provide a decade or three hence, or whether that income (whatever it is) will be enough to cover the income they'll need at that point. That said, there are plenty of ways to mitigate all the risks of retirement, which I write about in my newsletter and in my GRS posts. But for now, I'll just put the question to you: Do you think retirement is too risky? How do you plan to address any potential problems?

Finally, the message of this post is most definitely not “stop saving for retirement.” I continue to max out my 401(k), despite my hope that I'll be able to work forever. Nevertheless, many people are forced to retire due to bad health or a bad economy. Plus, I'm just 42. By the time I'm 72, I may have changed my mind — or my body has changed it for me — and I'll actually be ready to sit on my butt all day.

More about...Investing, Retirement

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others
guest
158 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Brian @ Progressive Transformation
Brian @ Progressive Transformation
8 years ago

The best way to handle this is to not retire. At least, that’s my plan. There’s not way I am going to be able to work full-time for the rest of my life but if I can find myself creating work while doing what I love, it won’t feel like a job. There are so many ‘retirees’ out there that work as a service to their local communities. Not only ones it allow them to create social interaction, but they suddenly have living expenses in their pocket. Besides, we are all active people, I know a lot of those who… Read more »

Jacqueline Ross
Jacqueline Ross
8 years ago

One of the great things about investing in and owning income real estate or a business is that each has the potential to provide ongoing supplementary income without the need to exert a lot of physical energy. When you can plan and prepare to establish additional streams of income you eliminate the need to ask, ‘How much do I need to save for retirement?” We are in the middle of a societal shift away from manufacturing/industrial/physical labor towards digital/tech jobs. For those willing to expand and/or update their skill sets, there are ways to continue to be active/engaged and to… Read more »

DrP
DrP
8 years ago

“Nevertheless, many people are forced to retire due to bad health or a bad economy.”

Yes, this. And especially bad health. You cannot expect people to work their butt off at age 75. Some will still be able to work a full day and be useful for a company, but others may not.

So I would advise everyone to assume they have to quit working at age 70… And save up so that you can.

Meghan
Meghan
8 years ago

As you mentioned at the end of your article, working for the rest of your life may not always be possible. My mother has been forced into retirement, first because of an illness, and now because of the economy. She’s even applied for minimum wage jobs, like working at CVS or Dominos, but no calls back. Those jobs tend to go to young people. It’s really scary. I’m 31 and have no idea what I’m going to do. I feel like I’m saving a lot for retirement, right now about 30% of my income because I’ve taken on some extra… Read more »

Tarun
Tarun
8 years ago
Reply to  Meghan

Dear Meghan, In your comment, you mentioned that you are 31, so one can guess that your mom must be in her late fifties. Please don’t mind my one personal question, which is – At this age why you or your family letting her apply for work at fast food joints or similar jobs? Why you or your siblings can’t take care of her? She must have taken care of you when you were young. Right? Their might be a social disconnect between us beacuse I am a Hindu from India(known for hindu undivided families), we have seen the bad… Read more »

Sonja
Sonja
8 years ago
Reply to  Tarun

Tarun, I can’t answer for Meghan of course, but there’s definately a strong cultural difference. Own responsibility is a lot more valued here. My own parents have money issues, but they would absolutely hate it to take a handout from me. They want to be able to take care of themselves, not burden their children. Besides that, it is also, socially, mentally and healthwise better for 99% of people to keep working. And there’s nothing wrong with a job at McDonalds to get those benefits. Also, assuming her mother lives to be 90, that means there’s another 35 years to… Read more »

Meghan
Meghan
8 years ago
Reply to  Tarun

Tarun, This is a good point and believe me is one that I have thought about. There are a number of reasons why I (and to a lesser extent my younger sister) are not helping our mother out. First, both my sister and I are still establishing ourselves in our careers, and only recently have begun to make some decent money. My sister got her first real job after doing her masters and spending 2-3 years afterwards working crappy cafe jobs because she could not find anything in her field. She is also heavily in debt with years of student… Read more »

Elizabeth
Elizabeth
8 years ago

Good points! Especially about longevity.

What I find difficult is trying to plan for expenses I don’t know about. For example, my parents’ generation couldn’t have anticipated they’d have home computers, cell phones, internet access and cable TV — yet many of these things are considered “essentials” for retiring baby boomers. I’ve read that people’s expectations of retirement have increased in the past decades and so — I would wager — has a sense of entitlement.

It makes me wonder what technological and medical advances are in store for me in 30 years.

Nicole
Nicole
8 years ago

That’s all well and good if you’re healthy, but not everyone is so lucky. My father retired medically at around 60 because he was told that if he didn’t his condition would kill him. He hates not working, but he’s too sick. Not everyone has a choice in the matter.

Jadzia
Jadzia
8 years ago

As a fellow Gen Xer (just turned 41, uh, yay), I’m a little surprised to hear what sounds like encouragement to never retire. I may be a little oversensitive on this matter, as I pounded my head against what felt like a concrete ceiling for years. Nobody wants to retire, so the next generation can never move up the ladder. Regardless of whether the not-wanting to retire is a free choice (loving the work, wanting to stay “sharp,” that kind of thing) or not-so-free (didn’t save enough money, had retirement savings decimated by the market), it still kind of sucks… Read more »

Rosa
Rosa
8 years ago
Reply to  Jadzia

Yes! Exactly! Also, the folks who started working in an era when everyone got a pension, and let that just poof! disappear before I even had a change to join up, now they’re all “yeah, I totally planned to never retire! That’s it!” Social Security and health care are problems we can solve politically, instead of all planning to keep working til we fall over. I keep running into service workers – retail, restaurant, nursing – who are barely able to stand up. I had nightmares that one OB nurse was going to lean on my stomach when she tottered… Read more »

MK
MK
8 years ago
Reply to  Rosa

55 or 62 when their bodies give out? Who have you been talking to? I am 61. I look 51. I feel 45. And no … I don’t want to keep working to keep you from getting ahead. I would love to retire today. However, since I will probably live to be 90, that’s not really feasible right now … Even though I max out my 401k each payday … There is not enough to live well in retirement … I don’t want to work .. I have to!

Rosa
Rosa
8 years ago
Reply to  MK

What do you do for a living? Do you you pick up & turn patients all day? Drive a truck and load pallets? Cut up meat on an assembly line? Dig out and tuckpoint basements? I have worked with lots of older people in office jobs – I think the oldest was a graphic designer in his 80s, who was a great and productive coworker. But in my daily life I see a lot of older, or sicker, people doing work they clearly can’t really handle anymore, in great pain, often leaving work undone that coworkers handle for them. There… Read more »

bareheadedwoman
bareheadedwoman
8 years ago
Reply to  Jadzia

THANK YOU for the ‘Prince Charles’ comment. We are always hearing about the ‘new 40’ baby boomers, or the brilliant star children of gen Y (why)…

UGH you never hear anyone talk about us genXers unless it’s some doom and gloom thing about the sandwich generation shouldering both education costs for the young with care costs for the parents–but even the late baby boomers get most of that thunder.

England is even petitioning to skip Charles and have the more popular Harry follow Elizabeth.

Bah. We should abdicate.

Sara
Sara
8 years ago

Huh? Even if they skipped Charles, wouldn’t it go to William?

Joe+M
Joe+M
8 years ago
Reply to  Jadzia

I pretty much operate under the assumption that more and more people will work until at least their full retirement age.

aib
aib
8 years ago
Reply to  Joe+M

I would like to run a small business before I hit retirement and keep it going as long as possible. It would also help cut my income down that had been deferred during my earlier years.

Meg
Meg
8 years ago

I’m sure this is going to bring on the flames, but part of my retirement plan is having children. Asians often expect their kids to help support them in their old age, and as we will do for our parents, so I expect our children to do for us. We save too, obviously. I’m 23, and my husband is 26, and we max out our Roth IRAs each year. Our parents have savings too. But at the end of the day, we expect the younger generation to sacrifice on behalf of the older.

Mark
Mark
8 years ago
Reply to  Meg

That’s what the whole world has done for the last couple millennia , and the rest of the non-western world still does.

It is also a great way to diversify your retirement, raise your children to succeed and then don’t burn bridges and alienate your children and they might actually let you move in with them if you need it.

Mondo Esteban
Mondo Esteban
8 years ago
Reply to  Meg

Eh – I don’t expect my children to “support” me in the financial sense, rather just give me family support when I am too old for my own good. Children can act as good decision makers when times are tough towards the end. We shouldn’t burden the young with our lack of planning, but kids definitely are a good thing to have going into old age.

Risky
Risky
8 years ago
Reply to  Meg

I wouldn’t have children for the sole purpose (or even as a part of the purpose!) to provide for you in old age. There are so many things that could happen – they may be unemployed, disabled, or rebelled and don’t speak to you anymore. Trust me, your kids will know why you had them – and if it isn’t because you simply really really wanted to raise kids they will know it. You should look into some statistics on how children care for their parents – the large majority are put in nursing homes with a few visits a… Read more »

bareheadedwoman
bareheadedwoman
8 years ago
Reply to  Risky

my parents are afraid they will be left to my devices so they signed on years ago–before they retired– to an investment in a local graduated assisted living facilities specifically so I won’t have to take care of them.

thing is, I’m pretty sure it isn’t for thought of me, as much as a afraid of how they would have to live since we have very different life philosophies….~chuckles~

Kristen
Kristen
8 years ago
Reply to  Meg

Or, if you choose not to have children, there’s an awful lot of potential monetary savings there, since children tend to be incredibly expensive. Hubby and I have no plans for children, and my number one fear is not having someone to care for me when I’m old. However, that fear alone isn’t a good reason to create a family, and there are no guarantees that your children WILL take on that responsibility. Our society is going to have to figure out what to do with people like me, though, because there will be increasing numbers of older people without… Read more »

Becky
Becky
8 years ago
Reply to  Kristen

Or you’re like me and were unable to have children even though my husband and I wanted them. Our strategy has been to put our energy into a lot of non-familial relationships, including friends younger than ourselves. And this sounds nutty, but I am working really hard to solidify pleasant, likeable behaviors in myself while I’m still young enough to acquire the habit. I don’t expect any friend to “take care” of me when I’m decrepit, but having a solid network of capable people who know I exist and are willing to help me out here and there is still… Read more »

Quest
Quest
8 years ago
Reply to  Kristen

IMO there are never any guarantees that children will automatically take care of their parents. It’s a box of chocolates. One might give birth to Pollyanna or Damien. Who knows? And to base having children on the assumption of potential caregiving could be construed as being selfish in the extreme.

Andrew
Andrew
8 years ago
Reply to  Meg

This is wishful thinking of the highest order.

AR
AR
8 years ago
Reply to  Meg

I think it’s one thing to hope that your kids will try to help you as you age (I hope that for my kids), but it’s another to count on them to take care of you. It’s unfair to assume that your kids will be in a position where they can support you. It doesn’t sound like you’re doing that, as you’re saving for your retirement now. But my point is that the statement, “We expect the younger generation to sacrifice on behalf of the older” may not be feasible or realistic in the future.

Ms Life
Ms Life
8 years ago
Reply to  Meg

I know where you are coming from, Meg. My culture is like that as well. However, my parents let us know while we were still very young that they did not intend to live with us or expect us to take care of them until they were too old to live on their own. My mother will be 71 and my father 76 years this year and they still work hard on the land and sustain themselves. Their independence has made us actually help them a lot more than I think we would have had they been making demands from… Read more »

Elizabeth
Elizabeth
8 years ago
Reply to  Meg

While I understand where the expectation comes from, I think people really have to do the math. For instance, even if a couple has kids in their late twenties or early thirties, those children will be in their prime earning years or retired themselves when their parents need the most care and financial support. I’ve seen it happen where part of the burden of care giving has fallen to the grandchildren, not just the children. (And the adult children were older and needed some help themselves.) I understand that people expect family to step up, but I think they have… Read more »

Laura
Laura
8 years ago
Reply to  Meg

I think this goes a couple of different ways – parents may expect children to help them in their old age, and children may need to boomerang back home one or more times while they get financially on their feet. http://money.cnn.com/video/pf/2012/02/06/pf_multi_generation_house.cnnmoney/ While we won’t force our son to live with us when he’s an adult, the house we bought is set up for multi-generational living so that if he chooses to, we can continue living under the same roof. (If he wants to move out, then the house is set up to allow a college student to live there for… Read more »

Marianne
Marianne
8 years ago
Reply to  Meg

Hmm. I wonder if this is my in-laws strategy. We are worried because they are sort of retired because they don’t have a lot of marketable skills and have chosen not to work. However, they can’t afford this lifestyle and it shows every time an unexpected expense comes up. Since they have lived this paycheck to paycheck lifestyle for most of their lives we don’t think they have much, if any, in the way of retirement savings. Further, they still have quite young children and aren’t in the best of health. We are afraid that we will not only end… Read more »

Bess
Bess
8 years ago
Reply to  Meg

As a younger adult whose parents will probably retire in the next 10-15 years, I have to jump in.

I certainly think helping parents out when they have raised you is a reasonable expectation. But I don’t like the position that puts children in whose parents are assuming they’ll have that extra support and who aren’t rigorously preparing for imminent retirement. I think that’s a really unfair burden to pass on to the next generation, to expect them to retroactively pay for the lifestyle of the parents, potentially for decades.

J
J
8 years ago
Reply to  Bess

I do not think that is a “reasonable expectation.”

No one chooses to be born; instead, our parents chose to have us. I feel that makes parents more obligated to deal with the consequences of that choice than their children.

bareheadedwoman
bareheadedwoman
8 years ago
Reply to  J

I wonder if an adopted child, or especially a child adopted older than average age, would feel the same way?

Jane
Jane
8 years ago
Reply to  Bess

This is especially true, considering the amount of student loan debt and overall lower wages that the current younger generations are experiencing. The reality is that they might just struggle to pay their own bills and get ahead. It’s quite a burden to expect them to support their parents.

How about we as parents right now eschew expectations to give our children the newest and the best material things and instead put more money into retirement? This will help them more in the long run.

bareheadedwoman
bareheadedwoman
8 years ago
Reply to  Jane

which is why we should be looking at those that run the logistics of the society asking why are such debilitating burdens necessary…

instead of pointing fingers at like-burdened others.

phoenix1920
phoenix1920
8 years ago
Reply to  Meg

My husband is from a family like that–they will care for their elders no matter what. But it is with dire consequences. My FIL has been supporting his mother (my husband’s grandmother) for over twenty years and is on the verge of bankruptcy and is having to work very long hours despite his own health problems. My MIL hates grandma being there and is very mean to her, but on the other hand, believes that it is her responsibility. (She’s very passive-aggressive). I fear what will happen if my in laws want to move in with us. We do not… Read more »

hasammie
hasammie
8 years ago
Reply to  phoenix1920

I’m pregnant with my first and don’t plan to have anymore, because I know my husband and I will have to support the generation before us.

jaime
jaime
8 years ago
Reply to  Meg

didn’t you mention you were like 31? You still have enough time to set up a retirement fund. As for kids don’t count on them being your retirement, my mom used to work with seniors and many of them didn’t talk with their kids anymore. Besides don’t you think your own kids will have their own lives? What if they get disabled, terminally ill? You’ve given up before you’ve even tried, instead of burdening the next generation, why not work and set up your own retirement? If I ever have kids I want to know I had them because I… Read more »

sarah
sarah
8 years ago

I think it’s easy at 40 to say you’ll never retire but when you hit 70 it’s a different story. My aunt retired from her office job around 65 and worked retail for another 10 years part time. Toward the end of that she was in a lot of pain and having a hard time getting through a 4-hour shift. On the other hand my parents JUST turned 60 and my mom has already retired (that is, stopped looking for work) and my dad says he wants to retire as soon as he’s eligible. I worry about them but they… Read more »

Quest
Quest
8 years ago
Reply to  sarah

Sarah: Sometimes when I hear people say they’ll never retire what I hear is “I don’t have a life outside of work.”

I completely agree with you.

Rachel
Rachel
8 years ago

Where are the cat pictures?!

Jen Guzman
Jen Guzman
8 years ago

What are your thoughts about taking a lump-sum pension payout versus risking that a defined benefit may shrink or disappear? We are in our mid 30s and my husband is eligible for a small pension (currently valued at about $650/mo). I cannot see him with this company for the long haul. He works for a media company, which makes me think the risk is high his pension will not be intact when we retire.

Rosa
Rosa
8 years ago
Reply to  Jen Guzman

Do the math, don’t listen to the pension fund or company advisor.

rageon
rageon
8 years ago
Reply to  Rosa

Unfortunately, doing the math requires a lot of assumptions that we really can’t answer with any sort of confidence. I went through such a decision when leaving a State job, and needing to decide to keep a pretty small pension or roll over the lump sum into an IRA. I looked at it a copule of different ways. First, what was the present day value of the pension? But of course that requires some confidence as a what inflation will do over the next 30 years. I also tried to look at the expected value of the pension as of… Read more »

Rosa
Rosa
8 years ago
Reply to  rageon

You’re right about the assumptions. But when I’ve seen companies push lump sum, they have made assumptions that I didn’t agree with at ALL – high returns on my investment, low or no fees, stable tax rates, etc.

Jen Guzman
Jen Guzman
8 years ago
Reply to  rageon

Thanks for outlining your thinking process in making the decision, it was helpful.

Mondo Esteban
Mondo Esteban
8 years ago

The idea of retirement is sort of odd if you think about it. Did people 1000 years ago get to sit back for the last 20-30 years of their lives? Probably not. 2000 years ago? Not really. People continued to work as long as they could until they were too sick or elderly to do any physical work. The idea you can work for 40 years and take off another 30 years is a current manifestation and testiment to how well we have it now a days.

Cam
Cam
8 years ago
Reply to  Mondo Esteban

1000 years ago, the average life expectancy was about 25 years. Kinda made retirement a non-issue…

Mondo Esteban
Mondo Esteban
8 years ago
Reply to  Cam

True – But did they take off the last 5 years of thier lives and live in Florida?

Katie Schulz
Katie Schulz
8 years ago
Reply to  Mondo Esteban

I’m planning for a lot more than just 5 years.

Melanie
Melanie
8 years ago
Reply to  Cam

Life expectancy from birth also includes high infant and childhood mortality rates.

For example, if you look at individuals in Classical Rome who survived past age 15, the life expectancy jumps from 28 to 52.

I.N.
I.N.
8 years ago
Reply to  Cam

25 years average life expectancy is a figure heavily skewed by high infant and child mortality. People who managed to survive childhood, often lived to their 40s and 50s.

bareheadedwoman
bareheadedwoman
8 years ago
Reply to  Mondo Esteban

people still got frail…but granny sat in the rocker by the fire and knitted the kids mittens while mom was doing other things…granny rocked the baby, watched the babies, possibly washed dishes…grandpa whittled shingles, toys, broght in the wood if he couldn’t chop it–all those little things that dad never had time to sit down and do, but still needed doing…

no, no one retired.

Dee
Dee
8 years ago

Is the implicit assumption here that current retirees do not knit or do dishes or otherwise engage in any sort of activity that is of any use to anyone?

Mondo Esteban
Mondo Esteban
8 years ago
Reply to  Dee

What I am saying is the ratio of working years vs. retirement years is different in the modern era than in the historic sense.

Triple E
Triple E
8 years ago

I’m 33 and I already plan to die at my desk one day, most likely of a heart attack, preferably at a very old age. Or that the country will rip apart at the seams and I get shot in the crossfire. Or that aliens will invade. Even if I save and save and save, I have no illusions that I’ll be able to retire like my grandparents did[0]. Don’t think I’m not preparing for it (I do read this site after all), but I don’t actually think it’ll happen. I figure, if I plan for the worst, I’ll enjoy… Read more »

cc
cc
8 years ago
Reply to  Triple E
Triple E
Triple E
8 years ago
Reply to  cc

I’m glad someone recognized the reference!

imelda
imelda
8 years ago
Reply to  cc

Wish I could like this comment a thousand times. Thanks for that link!!!! Too funny!

Ajay
Ajay
8 years ago

To Meg at comment #5, No flames, but no children either (thanks for nothing, DES!) Having children is not a guarantee of care, financially or otherwise. My Aunt has been placed in a nursing home, despite having a husband, 4 children and umpteen grandchildren. It is heartbreaking for the rest of the family (brother, nieces, and nephews) to have no opportunity to help her remain at home. Neither can we take her into one of our homes, without legal intervention. The lesson here – expect whatever you want, but don’t count on your children to take care of you. Also,… Read more »

bareheadedwoman
bareheadedwoman
8 years ago
Reply to  Ajay

I had a great aunt who, as a young widow, married another young widower with toddlers and raised those girls as her own. In fact, I was an adult before I realized my cousins were not blood. After 35+years of marriage, when my aunt’s health no longer enabled her to care for my gentle, feeble senile uncle…his daughters whisked him off into a nursing home in their home city in the next state. They left my aunt to be “dealt with” by her family, which eventually meant nursing home by her choice. She didn’t think she would live long because… Read more »

LB
LB
8 years ago

This story breaks my heart!

Olivia
Olivia
8 years ago

I think probably the best course of action is to plan for the worst and hope for the best. The best defense for the unforeseen is to be flexible. Therefore, save lots! I certainly am. But also develop a variety of skills, ones that either make you money or save you money. Become self sufficient, or develop side income of some sort that you don’t mind doing after retirement. Be willing to downsize. Do you really need all of those bedrooms, push come to shove? I think planning to retire is risky, but no more risky than planning to work… Read more »

Tevin
Tevin
8 years ago

I simply don’t understand why retirement should lead to being “ready to sit on [your] butt all day”. The fact of the matter is, there are a lot of things you could be doing in retirement(travelling, volunteerism, and teaching come to mind first) that wouldn’t necessarily be considered a job, and some of these allow for expenses to be paid for if you’re creative enough. Personally if you’ve got your health and adequate wealth, retirement is just another phase of life where you’re not necessarily tied to a full-time job and can actively pursue other interests.

Joanna
Joanna
8 years ago
Reply to  Tevin

Retirement may mean sitting on your bum all day to some people, but to me it means no longer being forced to sit on my bum all day. I’d love to have the time to be out doing what I want to do.

Tara
Tara
8 years ago
Reply to  Joanna

Totally! I cannot wait for the day when I no longer have to sit for 8 hours glued to a chair in front of a monitor.

Daniel
Daniel
8 years ago

I don’t understand how if you plan out your retirement and figure out your annual expenses, adjusting either upwards for expenses that may arise in old age or downward for expenses that will go away, why you don’t think you will be able to invest enough in assets to produce enough income to pay those expenses. If you are maxing out your 401k every year you will end up with quite an abundance of money by retirement age. Invest it in assets that yield a decent income and you should be able to retire. There are many early retirees that… Read more »

Andrew
Andrew
8 years ago
Reply to  Daniel

This is naive.

Economic and political stability cannot be assumed. Good health cannot be assumed. Even the fortunate early retirees you speak of will be in trouble if (for example) we undergo hyperinflation or they develop a debilitating and expensive disease such as Alzheimer’s.

It is indeed possible that things will work out for the best, but then again, they may not. Go back and re-read points 3 and 5 in the article.

Daniel
Daniel
8 years ago
Reply to  Andrew

Health insurance is a protection against debilitating disease. Certain investments spinning off income will be good protection against hyperinflation (think real estate providing rental income or stocks historically a good hedge against inflation). It doesn’t make sense to assume if I am able to put together a portfolio of investments that put out $100k in passive income a year, while I keep my expenses down to say $40k a year, that I would not be able to retire. Proper investments will provide more income with each passing year to hedge inflation risks. Before stating that my figures are not realistic,… Read more »

MoneyforCollegePro
MoneyforCollegePro
8 years ago

Agreed about wanting to maintain at least a part-time job status into my later years. I don’t really believe in the traditional “retire at 65 and then enjoy your life” bit. Enjoy our lives now, save for the future, and never stop working. You can have a much more fulfilling life if you live it along the way well before you hit age 65.

Rob+Bennett
Rob+Bennett
8 years ago

My view is the opposite of the one advanced in this article. Retirement is today far safer than it has ever been before and far easier to achieve than it ever has been before. The trick is tuning out the message of Wall Street and all its Buy-and-Hold mumbo jumbo. Buy-and-Holders believe that there is no need to take valuations into consideration when setting their stock allocations. The result is that they overinvest in stocks when stocks are priced to provide poor long-term returns and underinvest in stocks when stocks are priced to provide great long-term returns. It’s almost impossible… Read more »

Ru
Ru
8 years ago

As an artist/designer/craftsperson, I’m hoping I’ll work til I’m dead. They’ll find me slumped forward over my drafting desk or in front of the kiln or splayed out while packing a huge shipment of teacups. That longevity calculator said I’d live to be 92 (97 if I bothered to exercise a little more). It’s funny to think I’ve got another 70 years on this planet, but based on levels of lead poisoning and silicosis amongst ceramicists, it’ll probably be less than that. What’s the point of retirement anyway? I’m pretty sure all that inactivity just makes you wither away into… Read more »

Elizabeth
Elizabeth
8 years ago
Reply to  Ru

It’s funny how people talk about retirement as if everyone has the same sort of job. Academic research is just starting to look at how career path and career satisfaction affects people’s desire to retire or keep working. Sometimes people just get physically and mentally burned out.

What scares me is getting dementia or other another disease that will physically or mentally prevent me from working as long as I want.

Laura
Laura
8 years ago
Reply to  Elizabeth

+1. I work for a university with faculty who are brilliant in their fields but…quirky (o.k., difficult). They stay forever; the admin staff, however, get burned out dealing with them. (Certain faculty have revolving doors in their offices for the admins who come and go.) In a recent retirement workshop about our pensions (yes, we still have pensions, amazingly), they mentioned that the average age of faculty retirement is 72, whereas the average age of staff retirement is 62. That correlates perfectly with my own observations. The other admins think I’m insane when I say I’m aiming for 70 for… Read more »

A-L
A-L
8 years ago
Reply to  Laura

I feel the same way in terms of teachers working with students. I work at an alternative school, and it’s the mental burnout that gets the staff.

Ru
Ru
8 years ago
Reply to  Elizabeth

I am REALLY worried about somehow damaging my hands, or losing full function to something like arthritis. However, if I evolve into a “real” artist, like Damien Hirst or Dale Chihuly, I can just bark orders and get interns to do to work while I sip champagne cocktails brought to me by my robot butler.

John
John
8 years ago

Being able to save for retirement, and working the kind of job where you can make the call to work past the typical retirement age are luxuries that not everyone has. Please consider this before citing Social Security income figures to declare that most Americans are bad at planning for retirement.

Adam P
Adam P
8 years ago

Other than a mortgage, my parents (62-63) have no real savings. Like a lot of people, I’m petrified of them “retiring” as they don’t have enough money to support themselves and I’ll end up having to pay for them at the cost of my own retirement goals. I wish more attention in the PF world was paid on this growing trend. To the poster above who said the plan was to rely on their kids to support them, ugh. That’s awful, and very unfair on your children in my opinion. Save and live within your means and take care of… Read more »

Quest
Quest
8 years ago
Reply to  Adam P

I completely agree with you regarding the terrible notion of giving birth to children purely to produce built-in caregivers. Sorry to read that your parents are going to be financially dependent upon you. I believe that much of the financial ignorance among older people today is generally because of a lack of information available to them when they were younger. Many people did not discuss their financial situations among themselves when your parents were young. There is no denying that the internet now provides a wealth of info for all ages but this is a resource that was non-existent back… Read more »

Susan
Susan
8 years ago
Reply to  Adam P

You have described my parents to a T. They had no savings to speak of and counted on the equity in their home to be their “retirement.” They both worked well into their 70s, but because my father started a business they refinanced their home for the capital and it was not paid off when they retired. With just SS and a very tiny pension coming in they both worked part-time to make ends meet. Once they could no longer work they took out a reverse mortgage. That kept them in their home and gave them some funds to draw… Read more »

imelda
imelda
8 years ago
Reply to  Adam P

I would LOVE to see more conversations about this topic. The only thing is… what’s the solution? There isn’t really one, is there? We’re going to have to support our parents, and that’s that.

I don’t think it’s “terrible” for parents to count on their kids to help them in old age. It’s a cultural thing, as others have said. I wish it weren’t frowned on in the US. I think our culture makes it very hard for multiple generations to support each other, which is pathetic, and foolish.

Jill
Jill
8 years ago

I think it’s a dangerous situation that the boomers aren’t going to be able to support themselves AND their children don’t see it as their societal/familial/whatever duty to then take on that responsibility (or they won’t be able to even if they wanted to). My parents didn’t need to support my grandparents since they had put away enough and lived simply. They were still able to leave something behind even though the last two lived into their 90s. In contrast, my mother died at 55, but she did say she was at least grateful that she didn’t have to worry… Read more »

Elizabeth
Elizabeth
8 years ago
Reply to  Jill

Oddly enough, many boomers can’t afford to retire because they’re supporting their parents and children (boomerangs!)

I think it’s also important to realize that when the recession hit, people lost a fair chunk of their portfolio and that disrupted their retirement plans too. That could happen to any of us in the future.

Rosa
Rosa
8 years ago
Reply to  Elizabeth

An awful lot of my GenX friends are *already* taking care of their parents. I don’t know what happened to our grandparents generation if they were addicts, or saved nothing and became unemployed at 58, but I know a lot of Boomers in those situations, and they live with their kids.

I am so grateful my addict parent got sober (and remarried.) I watched a friend have to say “Mom, you absolutely have to have your own place before this second baby is born, there just isn’t room.”

imelda
imelda
8 years ago
Reply to  Jill

Yet another topic we should discuss! Why is it that the Greatest Generation seemed to do well in retirement, while many Boomers are panicking? I wonder if it has to do with our expectations. Maybe the Boomers expected they would get everything their parents did — a healthy SS system, plus pensions, a paid-off house, etc. Then that all fell apart. But meanwhile, we’re stuck with the expectations of a lifestyle that such a system provided. We expect that people today will retire for 20+ years, live independently, and not rely on anyone for help. Except now they have to… Read more »

Jennifer Gwennifer
Jennifer Gwennifer
8 years ago

My dad is of the “I’ll work until I’m dead” persuasion. He’s nearing 60 and has been self-employed for the past 20 years. He has very little set aside for retirement. Other than selling the house (paid off 5 years ago) and my mom’s moderate 401K, I’m not sure what they plan on doing if my dad gets injured or develops health problems in his late 60s like both his parents did. He has already had to refuse a few jobs because the dust and mold in old houses aggravates his lungs. (I try to talk to them about catch-up… Read more »

Chris
Chris
8 years ago

Start as early as you can Jennifer. If things go well, you’ll have lots of choices. If they don’t you’ll have something to fall back on. Savings and minimal debt have gotten me through plenty of difficulties. And there are ways to get at the money in cases of true needs. ROTHs can be used for house down payments, I believe.

Lisa
Lisa
8 years ago

Just last week I made it through my company’s 7th round of layoffs in the 11 years I have been here. And what I’ve learned from this experience is that very few of my co-workers chose when they retired – it was chosen for them. Most of them got the ax in their late 50’s, early 60’s. None of them were ready for retirement and were bitter that their hand was being forced. None of them have been able to find full-time employment that provides health insurance. So until this country changes its mindset and decides that people in that… Read more »

Laura
Laura
8 years ago
Reply to  Lisa

Yep.

http://finance.fortune.cnn.com/2012/02/03/long-term-unemployment/

While the majority of all unemployed Americans are under 25, the majority of *long-term* (more than 6 months) unemployed are over 55. That means more older workers are not being rehired; the ones 62 and over are retiring because they can at least get social security income when their unemployment runs out.

PawPrint
PawPrint
8 years ago
Reply to  Lisa

I agree 100%.

Brad Moore
Brad Moore
8 years ago

Maybe retirement is risky! AARP did a study a while back which showed that people who retired where more likely to DIE EARLY!

So perhaps retiring early is more dangerous from a physical perspective – but less so from a financial perspective. I’ve observed over the years that, in 100% of cases, dead people do not need money!

Mondo Esteban
Mondo Esteban
8 years ago
Reply to  Brad Moore

What if they died early but died happy vs. died later and miserable.

rageon
rageon
8 years ago
Reply to  Brad Moore

Cause verse Correlation alert.

Perhaps the study accounted for this, but I would presume that it was just as likely that those who retired earlier were likely of worse health already — and were thus more likely to retire — whereas those who were healthy were able to keep working.

Lindsey
Lindsey
8 years ago
Reply to  rageon

Confusing causation with correlation is a huge pet peeve of mine. The media loves to present these research studies as proven causation, which completely misinforms the public, since not everyone understands research methods and statistics. Great job of pointing it out!

imelda
imelda
8 years ago
Reply to  rageon

Yeah, ditto what Lindsey said. Great job. I got chills reading your comment, when I realized what a massive caveat I may have overlooked in believing that statistic!

frugalportland
frugalportland
8 years ago

oh, dear. this makes me want to go buy a lottery ticket.

bareheadedwoman
bareheadedwoman
8 years ago
Reply to  frugalportland

seeming more and more like the odds are about the same.

Quest
Quest
8 years ago

You raise a lot of good points and it’s true to say that many of us who are contemplating retirement have not saved enough money. But, where do you draw the line? Often times, a person has to look at what their resources are versus the ways in which to make the most of those resources. One just can’t live a lemming life of fear. In our case, I know we haven’t saved enough money because all of it was spent as fast as it came in but that doesn’t mean that all is necessarily lost. We have 5 years… Read more »

K.C.
K.C.
8 years ago

As an early retiree, I can tell you that retirement is not sitting on my butt all day. I’ve been retired three years now and I’m as busy as I was when I operated my business. Only now I do things because they interest me, not because I need to earn a living. My wife and I had lives outside of work all during our working years. Retirement has allowed us to expand those lives and pursue new interests. As for money, first we had very low lifestyle expectations for retirement and we retired without any debt. We’ve always lived… Read more »

PB
PB
8 years ago

One of my children has INFORMED me that when she has children I am going to come to live with them and raise them. Guess what is not going to happen.

Ely
Ely
8 years ago

I would like to point out that the majority of dedicated volunteers out there are retirees, those old enough to still have decent pensions. I worry that many organizations that rely heavily on volunteers – such as our local food bank – will fall apart as more people are forced to continue working for money as long as their health allows. But I suppose that’s life. I have to plan to live to be 100, based on my health and family history. My grandmother retired at 65 and hasn’t slowed down a bit, traveling the world, gardening, generally keeping busy.… Read more »

bareheadedwoman
bareheadedwoman
8 years ago
Reply to  Ely

God will take care of me even if I have to starve to death first 😉

Danielle L. Schultz, CFP
Danielle L. Schultz, CFP
8 years ago

Over and over again I hear (as a fee-only financial planner)”oh, I’m never going to retire”. Almost every time it’s said by people in their fifties who haven’t saved anything and don’t want to change their spending habits. It’s not because they like their jobs so much. It’s great to work at something you love as long as your health holds out. But if you have a stroke, or need hip replacement, or maybe your kid moves out of town and you’d like to see your grandchildren more than once a year, well, retirement might look a teensy bit more… Read more »

bareheadedwoman
bareheadedwoman
8 years ago

I’ve worked at firms that routinely fired non-exempt staff between 50-55. Who felt the blow? Receptionists and mailroom and clerks, the occasional secretary–especially if she was a legacy secretary and her partner retired.

Illegal? sure. Did they know it was illegal? Shoulda…they were law firms. But the burden of proof was on those that couldn’t afford to fight and they knew it.

Cathy
Cathy
8 years ago

I have taught public school for 36 years and at age 57 am ready to stop. I love what I do and I love my kids but government interference has made it almost impossible to remember that we are here for the kids. Still, I need health insurance. I will get a state pension but it will barely covver my insurance permium for my husband and me when I retire. I don’t intend to “sit on my butt” when I walk out but be involved in activities that can make a difference in lives. I also don’t expect our son… Read more »

Rosa
Rosa
8 years ago
Reply to  Cathy

My mom spent a few years teaching at the community college after she retired as an elementary school teacher, and loved it. Though I think once she got over the “what will I do all day” fear she enjoys actual retirement more.

Kristen
Kristen
8 years ago
Reply to  Cathy

My mother in law taught until age 67. Now she substitute teaches on a part time basis in the same school, and is having a great time, while funneling those earnings into her travel savings account 🙂

Luke
Luke
8 years ago

As many have already stated, there are many unknowns in retirement, not the least of which is one’s health. However, just as saving, investing and living below one’s means doesn’t guarantee a comfortable retirement, it sure goes a long way towards improving the odds of such. In this same way, investing in one’s health by making certain lifestyle choices (eating right, exercise, not smoking etc etc), doesn’t guarantee good health in the years to come but certainly increases the likelihood. (so many ailments are the result of lifestyle choices and not simply bad luck) A simple concept: for every hour… Read more »

Clara
Clara
8 years ago

Wow, the life expectancy calculator said 101. My retirement calculations have only been to 95. At 49 I feel I am just getting started in many ways. I have enough saved to create a frugal retirement at 70 — although apparently my planning is about 6 years short — now I am planning a new career doing things I love that will contribute to the world. While I am planning that, I also think about that transition to a partially retire lifestyle. I picture a day of doing some writing, maybe some consulting in my field, working in my garden,… Read more »

Jerome
Jerome
8 years ago

What a good article!! You are right, retiring and than doing nothing is very dangerous. But retiring and having an active life including one or two side-jobs seems a very healthy life to me. I retired 5 years ago at 41 from the regular workforce. We now live from our nest egg, plus little side-earners. Things like a consulting job or a bit of trading or giving advice to start-up companies. None of these jobs generate wads of cash, and they are totally un-plannable, but they allow us a bit of luxury now and than and they keep us fit.… Read more »

Mike Piper
Mike Piper
8 years ago

My plan:

1) Work as long as I can.

2) Delay Social Security as long as possible.

3) Use inflation-adjusted lifetime annuities to satisfy my basic spending needs not already satisfied by Social Security.

4) Use a low-cost diversified balanced portfolio (likely with a large helping of TIPS) for anything that’s left.

Kenneth
Kenneth
8 years ago

I’m 62 and working. My wife is 58 and has not worked in 4 years. When you lose a decent job in your 50s or 60s, through no fault of your own, it is really hard to find a replacement. So she just stays home and makes the home. So age discrimination, right or wrong, IS a factor. Many of you won’t be able to work forever because of this. We have had financial problems in the past. But we have frugal religion and have had it for a few years. I drive an 8 year old car. I brownbag… Read more »

JD Carroll
JD Carroll
8 years ago

At what age is it no longer smart to “Max out your 401k” ? I’m 66, work full time , not taking SS. Do I max out till 70 and switch to a Roth IRA?

partgypsy
partgypsy
8 years ago
Reply to  JD Carroll

Actually the advice is not max out 401K fund, it’s contribute to the match of 401K, and then max Roth. But depends on your earnings how much (if any) you are qualified to contribute to Roth IRA.

Jessica
Jessica
8 years ago
Reply to  partgypsy

I think that’s the general advice because for most people it is true but that’s not always the most applicable. My husband and I, for example, are in the 33% tax bracket so we max out our 401k’s every year no ifs, ands or butts. Plus neither of us have qualified to contribute to a Roth IRA for several years. I think people should max out every tax sheltered savings vehicle for retirement that they can. For example, I had a baby this past year and chose to take off 3 months and have fallen below the income limit for… Read more »

Susan
Susan
8 years ago
Reply to  Jessica

If your income is too high to qualify for Roth, contribute to non-deductible IRA and then you can convert that to a ROTH.

That is what I have been doing for several years.

Bridget
Bridget
8 years ago

it is definitely too risky if you leave it up to social security and home equity lines of credit! I’m not particularly interested in retirement (it’s 40 years away!) but I feel like retirement age will probably increase by the time I get there anyway. Right now I enjoy working, and I hope to work most of my life. Nevertheless, I feel 100% responsible for my own financial health so I’m saving for retirement myself. I have an employer pension and my own RRSP’s plus additional savings. I feel like it’s dangerous to just count on one source, especially if… Read more »

chacha1
chacha1
8 years ago

My observation is that people who stay active with some kind of work fare better in ALL ways late in life. I have no intention of “retiring” in its sense of “stopping work.” My strategy, given that I am squarely at the midpoint of my projected lifespan, is to continue squirreling away money, but to focus more on achieving a 100% paid for residence for late in life. When I crunch the numbers, it looks completely do-able to pay taxes, insurance, and utilities, and to buy groceries, on $1000/mo or less in the area where I want to live later… Read more »

Zam
Zam
8 years ago

Depressing thread.

I’m absolutely going to retire and hopefully early.

I plan on being able to have an extremely active luxurious retirement, but the key is to commit to the following phrase that my Uncle Les would say:

“When the money is gone, it’s time to move on.”

If you are willing to off yourself when the money runs out, you’ll be fine.

I’d rather have 10-12 AWESOME jet-setting retirement years and check out then scrape by for 30, or even worse have to work past 60.. ugh, that’s a sucker play.

Evan H.
Evan H.
8 years ago

There are a few things that you can control. These are:
1. the amount you save
2. the expenses/fees you pay for your investments
3. the lifestyle choices you make for your health

Ideally, you should maximize #1, reduce #2, and eat right and exercise to maintain a healthy body and mind for #3. All of the other factors that are out of your control, especially gov’t programs (!!), only add worry and stress.

SJ
SJ
8 years ago

As someone who has never really had a ‘normal’ 9-5 job and has been self-employed for a while now, I guess “retirement” may mean something different to me than most. In fact, I’m not really sure what it does mean to me. I stopped trying to maximize income at all costs when I turned 35, so maybe that was the start of a semi-retirement, or maybe it was when I said goodbye to a fairly reliable w-2. The more savings/investments I have the more freedom I feel, which has led to different decisions concerning work. Therefore, I strive to be… Read more »

bethh
bethh
8 years ago

First of all, Robert is 42? *blink* for some reason I thought you were at least late 50s. I definitely want to retire, or at least have the option to do so. I’m about Robert’s age and with my company match I’m saving 22% pre-tax toward retirement, but am not quite maxing out the limits. However: has no one seen Harold & Maude? I have half a mind to go out at 87 under my own steam, rather than try to scrimp and save my way through a retirement with no end in sight. I’m afraid of senility and general… Read more »

Tara
Tara
8 years ago
Reply to  bethh

My sentiments exactly – when I get to a point where I feel like things aren’t going the right way, I plan to take myself out. A long painful decline is not for me.

Rachel
Rachel
8 years ago
Reply to  bethh

Well..You haven’t seen the tremendous fun and life my grandma has had since grandpa died when she was 90. She is now 95 and going very strong–vibrant, all-there mentally, busy and socially active.

Elizabeth
Elizabeth
8 years ago
Reply to  Rachel

Awesome 🙂 Some people are “old” in their seventies and some people are young in their 90s.

Experts don’t know exactly why, but people age at different rates once they hit their 50s and 60s. Lifestyle makes a difference, but you can’t beat good genes!

bethh
bethh
8 years ago
Reply to  Rachel

Well, I don’t intend to blow through my retirement savings, on the off chance I’m still going strong – that’s a fair point to make!

Robert Brokamp
Robert Brokamp
8 years ago
Reply to  bethh

“First of all, Robert is 42? *blink* for some reason I thought you were at least late 50s.”

I’m not quite sure how to take that. I suppose it would be worse if you said that after seeing a picture of me. Perhaps my collection of past Halloween costumes would help: http://www.facebook.com/media/set/?set=a.165121780189276.35287.100000743667777&type=3.

bethh
bethh
8 years ago
Reply to  Robert Brokamp

the Halloween shots are indeed illuminating!

I.N.
I.N.
8 years ago
Reply to  bethh

That’s my mother’s position. She is retired and has considerable investments. But she also wants a certain quality of life that includes some travel, her favourite hobbies, flowers, etc. She doesn’t care for Stuff and knows well how to be frugal, nothing extravagant – but she is sensitive to beauty around her and the experiences that make her happy. Her investments will likely last into her 80s but may be not into her 90s. She could ensure another decade – but she is not willing to sacrifice what makes her happy. She says she prefers quality of life to quantity,… Read more »

Kristen
Kristen
8 years ago
Reply to  bethh

My grandmother is just about to the end of her life at 95 years old. She has outlived two husbands and ALL of her friends.
My sister and I agree we don’t WANT to get that old. Actually, we joked recently about a suicide pact.

Lori Blatzheim
Lori Blatzheim
8 years ago

Retirement is multidimensional. There are so many things to consider. Thank you for the post, it was very helpful.

I have heard that those who do best at retirement are those who have other interests. I think that those who have the possibiity of making other income are also in a better position.

Retirement is a giant decision. It affects the rest of life. It deserves thought and attention.

Tara
Tara
8 years ago

My parents retired in their late 50’s after a lifetime of hard work and frugality… and they are definitely not sitting on their butts all day. They are active in volunteering and helping raise their grandchildren, not to mention hobbies and physical activity to maintain their health. Of course they are living better now than I ever hope to, because they have 401Ks, pensions and social security coming in – their income is greater than mine while I am still working full time. I know my retirement won’t be that cushy, but I am working hard and planning the best… Read more »

Rachel
Rachel
8 years ago

I agree with those who say it is a good strategy to continue to work, whether full time or part-time, as long as you have employment and feel you may need to bolster your retirement resources–given chances of being a nanogenarian or potentially high healthcare costs or whatever the reason. The most difficult aspect of retirement planning is, for me, foregoing appropriately enjoying my hard-earned income now just because there may be a financial crisis or rampant inflation in the decade I turn 67/70.

Chris
Chris
8 years ago

My husband is 66 and I’m 58. I’d like to retire at 60 as there are a lot of things we’d like to do that a full time job doesn’t allow. Most of these are activities – bike trips etc. that may not be available to us later as our bodies age. If I can find part time and flexible work, great but I recognize the difficulties. So, we’re saving more than the numbers say that we need – to make up for the risks listed above. We are living below our means – and we have a paid for… Read more »

doug_eike
doug_eike
8 years ago

Only a privileged few will have the luxury of retiring and resting on their laurels. Retirement is risky, and it’s incumbent on all of us to maintain job skills and continue learning in order to be employable.

The presence of this risk, however, does not necessarily mean that folks have to continue doing the same jobs or making the same amounts of money. More creative ways to make money exist now than at any point in history, and that means that retirement can be a dynamic and fulfilling experience. Thanks for the insights!

Elaine
Elaine
8 years ago

So many good points here. All in all, one can only rely on themselves. I find extreme value in my work, so I don’t think I will mind working as I get older. I may want to scale back in terms of hours and stress, but still work. Passive income, such as rental properties, is another nice buffer to keep money coming in…but, as you point out, real estate can be extremely volatile. Good thing I’m only 25!

shares