
Peter A. ScilovatiMarch 22, 2018
Our clients at HFA are inevitably trying to answer the ever-present question: “When should I retire”! Independent of the financial planning and retirement projections we conduct for clients on a daily basis we have read about interesting trends concerning retirement schedules.
Research has shown that more Americans are saying No to retirement and working into their 60s and beyond. It’s the “new” old age. A 2016 New York Times article reports nearly a third of adults aged 65 to 69 are remaining in the workforce while a fifth of those aged 70 to 74 are still working. About two-thirds of these individuals have full-time jobs, defined by the Bureau of Labor Statistics as working at least 35 hours weekly. This changing labor pattern is partly due to Americans’ expanding life expectancy. There are more centenarians now than ever – the Centers for Disease Control and Prevention report there are 72,197 Americans aged 100 years and older, which represents an increase of 44 percent since 2000.
As the typical lifespan increases, so do the chances of outliving one’s money. As a result, retirees – particularly those in good health – are staying in the workforce to offset their longevity risk. However, even those reluctant to continue working may elect to stay in their jobs longer once they see the significant financial, physical, and mental benefits attributed to delaying retirement.
Working longer increases the likelihood of a financially stable retirement. In addition, working longer helps clients compensate for shortfalls in savings that cannot provide the support their household needs in retirement. In an article in Investment News, Jamie Hopkins and David Littell, faculty members of The American College of Financial Services, discuss how preparedness for retirement increases from 49 percent with a retirement age of 65-years old, to 85 percent with a retirement age of 70. For those who find work to no longer be satisfying, spending discretionary income on enjoyable activities outside the workplace can provide the relief from stress while still allowing clients to gain the benefits of working longer, write Hopkins and Littell.
Benefits of Working Past Retirement Age:
Overall, delaying retirement for just a few years can transform an average retirement income into a better one and the wait provides health and wellness benefits, too. It is important to weigh the advantages that this may add to your retirement readiness. If you have any questions related to your specific situation, our financial planning team would be happy to help you evaluate and implement a plan. Give our office a call at 610-651-2777.
Source:
The American College of Financial Services, Bryn Mawr, Pennsylvania