Are you Rocking Retirement!?
You’re saving, you’re working, and simultaneously, you’re worrying that you won’t have enough at the end of the day to support your retirement.
Sound familiar? When 45 % of Americans feel they don’t have enough to retire comfortably.[i] Or when reliable sources say you need over a million dollars, but the majority of folks live off of Social Security [ii], it makes sense to worry. But what if there was another way, another perspective, to explore in regards to your retirement?
Are you Sacrificing the Present for the Future?
By now you’ve most likely read the articles and advice on how to plump up your retirement fund: work more, save lots, cut costs, downsize. While those tips are absolutely true and can help you get your savings in order, it’s hard not to feel like it is at the price of the present. Working in a job you’re burnt out on, rolling every coin, and cutting any extras out to save up for the future can be daunting. This is especially true if, even after all that hard work, you won’t be hitting the retirement savings goals you wanted. The median average Boomer will be retiring with $200,000 to live off of.[iii] This is also in a time when people live longer and all expenses from housing to medicine are climbing. In short, some people will need to do more with less. If you are working unhappily now, possibly ignoring your own health and livelihood for the future, it may be time to make a change. The good news is, that with an established career and skill set, making a lateral move into a field you’re more interested in may be easier than you think.
The first step in any future planning is to imagine your ideal scenario. In this case, what do you want to do with your retirement? As said above, people live a lot longer, travel is easier and more affordable and the world is at your fingertips. Take some time to really think about how you would like to spend this hard-earned time. Once you do that, you can form a realistic plan to make the dream a reality. But it has to start with the dream, think of all the things you’ve wanted to do but never had the time. Think of the time you’ve wanted to spend with family or the sights you’ve always wanted to visit. Do you imagine yourself volunteering? Or being an active member of the community?
Make Dreams a Reality
If you are in a slump at work, but you also not at your retirement goals, you have options. One option is to continue working, but change jobs or careers. By continuing to work into retirement, will slow the spending down of your savings. With income coming in, you can continue to pay down debt, and still be socking away money for later. With a job, even a part-time one, you’re still paying into Social Security and by deferring claiming it, you will end up with a higher rate down the line. If in your retirement fantasy you are volunteering or being a vital community member, perhaps a career change into a paying position that does something similar may be a better choice for the time being.
Work Can Be Good for You
For a lot of folks, the adjustment to leaving a title and a career can be very difficult. A lot of social interaction and friendships are made at work and leaving the field entirely can be both lonely and isolating. Idleness in retirement can contribute to a decline in health, both physically and mentally. Working, even part-time, can keep us tied to the world, while also learning new things and having to stay current. Studies have shown that retired people who pursued post-employment “bridge careers” reported better physical and mental health than those who fully retired.[iv] If you still have the stamina and health to do it, continuing to work, in a field you enjoy, can both offset costs and keep you active. Delaying collecting Social Security until 70 can add up to 32% more to your income.[v] Continuing to work allows you to use tax laws' catch up provisions to put away more.
Quantity and Quality
Of course, no one knows what the future holds, and a lot of people end up retiring earlier than planned due to health, or to care for a loved one. Studies have shown moderate activity, even as little as a ten-minute walk, can extend a lifespan by years.[vi] Regular checkups and lifestyle changes (like quitting smoking, changing diet, drinking less, etc.) can have huge effects on the quality and quantity of our later years. Finding work that energizes you and makes you happy, may be the solution to the retirement savings dilemma. It may be working for a non-profit in a field you care about, dropping to part-time instead of fulltime in your current field or job, it may be exploring a new career path entirely, or starting a business. Whatever it is, working will bring income in and keep you active and involved, which can help stretch your retirement funds longer and enrich your daily life in the meantime.
Working past 65 should be seen as a viable option, not as a punishment. Delaying retirement by only 6months is the equivalent of saving an additional 1% over 30 years.[vii] Many people do amazing things well into their later life in their fields after all. So, if the math is not adding up to have the retirement of your dreams, better to make the present more fulfilling and continue working and saving towards your goals. This is one way to have a Rockin’ retirement.
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- What You Need to Know About Retiring with a Mortgage
About the Author
Bob feels strongly that you only retire once leaving no room for mistakes. He is dedicated to building and more importantly preserving investors assets. Bob is a Financial Advisor with Cambridge, an independent broker-dealer, honored to be among the most respected firms in the industry.