Delayed retirement is increasingly becoming popular among baby boomers, and it is primarily because of two reasons:
Longevity and the lack of retirement savings.
As many of you are aware of by now, turning 65 years old opens us to a great deal of uncertainty. Many are living longer lives than they initially anticipated and saved up for. This leads to elderly individuals looking to family members and grasping for support programs just to get through the day.
This isn’t the ideal retirement that we all planned for, is it? However, this is the reality of many elderly individuals now.
Moreover, the younger age groups set to retire in the following years are simply not ready. The number of baby boomers who lack savings for the golden years is just alarming. Research points out that out of the 76 million from this generation, approximately 35 million still have no retirement savings today—the youngest ones are now 52.
However, it doesn’t stop there.
To make matters even more worrisome, many are still unsure of how to cover their future care needs. Despite the various long term care payment options available now, many have yet to secure coverage to fund the costs.
Delayed Retirement: Advantages and Disadvantages
Retirement is a tough challenge to overcome, and baby boomers are pushing it back further down the line. For this month’s roundup, we will be focusing on delayed retirement and what it entails.
Let’s get started:
6 Reasons To Delay Retirement
As mentioned earlier, many decide to postpone retirement because of longer life spans that need to be funded and the lack of savings that many baby boomers seem to be facing. However, many individuals decide to stay longer in the workforce for other, more positive reasons. Next Avenue lists on Forbes the six factors and motivations that push baby boomers to continue working after 65.
You’re Likely to Live Longer If You Retire After 65
Citing a study done by Chenkai Wu, Ph.D., Nicole Torres of the Harvard Business Review shares an interesting theory about the retirement age and how it affects longevity. Wu’s research found that the mortality rates of the survey participants who retired at age 66 dropped by 11%. Wu reiterates that this may be because of the benefits that come with working longer: individuals remain active, engaged, and social.
Can you afford to live to age 95?
Can your finances handle 30 years worth of expenses after retiring? MoneyWatch’s Steve Vernon shares on CBS News the key considerations in planning for retirement that goes beyond what we initially expected. He also highlights the importance of having medical and long term care coverage to cover the high expenses that typically come later on in life.
Delayed Retirement Good for the Mind and Probably the Economy
Lois M. Collins shares on Connect Statesboro the different benefits that come when individuals delay retirement. She points out that life satisfaction during retirement often drops after the first year. Moreover, she also cites that contrary to popular belief, maintaining an older demographic in the office space can help with productivity.
David McCann presents through CFO another perspective in retirement readiness. Thanks to Hugh O’Toole’s move, companies discovered that retirement delay by an employee could be costly. This is because individuals who retire on time are typically replaced by a younger, less expensive employee. If 100 people in the company decided to retire at age 70, the company could face costs of more than $17 million.
As much as many of us want to retire at age 65, various aspects hinder us from doing so successfully. The reality that many people face is this:
Studies show that many American workers do not feel very confident in their ability to afford a comfortable retirement. People are struggling to save the funds that they think they need to fund their retirement years. In fact, in the same study, 3 out of 10 workers share that planning for retirement makes them feel mentally and emotionally stressed.
Moreover, a separate study shares that baby boomers who lack confidence state that they wish they would have saved more (68%) or started earlier (67%).
Retirement is changing, and not many are sure of how to accept these developments.
Yes, delaying for retirement appears to be the best option right now—and for many it is. However, you must always remember to take a long moment to process how this will affect your life. It may work for your peers, loved ones, and even the person down the street, but remember that your situation may be different. This is why you should also take the time to ask yourself this question:
What are the pros and cons if I choose to postpone retirement? Do not just concentrate on the benefits of delaying retirement. This way, you get to choose wisely and effectively.
Planning for the Future You Deserve
In our previous post about how technology helps baby boomers plan for retirement, we highlighted the importance of proactive planning. This also plays a key role in delaying retirement.
While it is true that spending more years in the workforce allows you more time to earn and save money, the urgency of having a set plan for retirement and long term care remains the same. You must not see this time as a way to relax and not be as proactive when it comes to finding the plan that you need. Remember that age is still a key factor in securing comprehensive coverage.
If you wish to start planning for long term care now, please feel free to contact ALTCP.org. We would be glad to help you find the coverage that you need without breaking the bank.
You can start by sending a free quotation request for long term care coverage. This way, you get to see what your options are, and you get to consult with one of ALTCP.org’s insurance specialists. He or she can advise you on which steps to take after.