When thinking about retirement and planning for your future, it’s important that you make realistic assessments of what life will be like when you reach retirement age. Otherwise, you could end up with too little money saved and a lot of financial stress.
Unfortunately, many workers have retirement plans that are unlikely to materialize. And when they don’t materialize, it can create a big problem.
Future retirees could end up with too little money because of this faulty assumption
A recent study of the Transamerica Center for Retirement Studies presented a huge flaw in the retirement plans that many Americans are making. According to the research, 58% of current workers plan to work at least part-time during their retirement. And a total of 47% of all workers plan to delay retirement until they are over 65 or never plan to stop working.
Unfortunately, if this is your solution for your senior years, you are likely to find yourself in a world of financial hardship. This is because it is often not possible to continue working after the age of 65. And it’s certainly not realistic to expect to be able to continue working forever. While many people hope to stay in the workforce for a long time because they fear having enough money saved up to support themselves when the paychecks stop, this is wishful thinking for the vast majority.
The reality is that the average retirement age is 62. And the reason he’s so young, despite so many people wanting to keep working, is because it’s getting harder and harder to hold down a job well beyond that.
There are a myriad of reasons why this is the case. For some people, health problems force them to stop working. For others, it may be the need to care for a spouse, or even their own aging parents at the end of life. And job opportunities could also dry up this late in life.
Since retiring might not be a choice, but rather something you’re pushed into, it’s not a very good idea to plan to work late into your 60s or to assume you’ll be able to work. indefinitely. If paychecks are how you plan to support yourself and they stop before you want them to, this will create a huge problem for you.
How to make a realistic retirement plan?
Instead of hoping that you’re going to be one of the lucky few who can work until you’re eighty, it’s far better to assume that you’re going to have to stop working at 62 and make a financial plan for it. meet your needs. from this age.
This will likely mean that you will need to increase your savings, both because you will depend on them to cover your expenses for longer and also because you may have to claim Social Security sooner than expected.
By assuming the worst and preparing yourself financially for early retirement, you can ensure that you are financially secure even if it turns out that you cannot work. If you’re lucky enough to hold a job longer, you’ll end up in an even better financial position than you originally expected.