Boomers Are Not Retiring Soon
Merrill Lynch surveyed baby boomers about retirement and found that plans have changed a lot over the last decade or so. Most have no plans to stop working, in some way, well into their golden years. It is not that unusual for people to work past retirement age for a variety of reasons.
But many people, in the past, planned to retire at 65, the normal age when benefits like social security and Medicare kicked in and companies tended to hand out a gold watch. Now, social security benefit ages are moving up, and we all know that it will be tough if that is our only source of income anyway. If you haven’t managed to sock away enough money to supplement that income very well, you are probably more in the majority than the minority.
- An average boomer still plans on retiring from their current job at the normal retirement age. But they expect to supplement their income with another job or business. Instead of seeing retirement as the end of work, they see it as the start of a whole new career.
- Boomers do expect to stop working and retire at some point, but that age tends to be in the late 60′s or early 70′s instead of the mid-60′s. Part of this is the fact that people enjoy longer life and healthy life spans now. Add to that the need to provide income to support a longer life.
- Boomers are also concerned about their kids and grandkids. Many say they need to help supplement the younger generation too.
- Men and women are different. Who knew? Men are more likely to look forward to a retirement filled with relaxation and fun while women are more likely to want to take advantage of having less family reponsibility to fulfill some career dreams.
Pitfalls to Retirement Planning
These are some common pitfalls to retirement planning. These things are not unique to baby boomers, but if anything, we may have learned from previous generations to consider some dangers.
- Underestimating Lifespans – The good news is that boomers are living longer, but we have to plan for a longer retirement.
- Thinking we can work forever – Eventually we all seem to get to the point where work will get a lot harder.
- Health Care Costs – Many people are just waiting for the day when Medicare kicks in. But Medicare does not cover anything. Medicare supplements are commonly purchased to fill the gaps. Long term care is also expensive, and actual long term care is not covered by Medicare.
- Returns on Investments – I guess that we should have all gotten the idea, by now, that it is impossible to know how well investments will perform in the future. When my parents were younger, they enjoyed 10% returns on savings that they thought would serve them well in retirement. Now a bank CD can barely return a couple of percent. Other investors saw their wealth decline in the last few years.
Aging isn’t easy, and planning to stop work is also not easy for most of us. Fixed incomes tend to devalue over time, and it is hard to know what the future will bring. You can join the discussion here: Retirement Planning – What Me Worry?
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You are right on with your assessment. Whether due to the recent economic “adjustment” or the fact that retirees want to keep active and engaged via some second-life job or endeavor, Boomers seem to be planning on working beyond retirement age. For those who work was a four letter word, plans are likely to find a different path or career instead of staying in an unsatisfying role. But there are some who enjoy what they do and want to keep doing it. Whatever makes you happy!
Dave at lovebeingretired.com