More than any topic, how to achieve a worry free retirement ranks highest and is one of the most rewarding parts of my work. Let’s start a conversation on how to achieve retirement peace of mind.
The idea of retirement still rings with the notion of getting your last paycheck at age 65, leaving your work, your colleagues and your working life for good. But over the last 20 years, due to both the desire for financial security as well as changes in society, the number of individuals on the job after age 65 has increased very steadily.
Why Americans are Making the Choice to Work Longer
Society has changed. The ideas about what it means to have a fulfilling retirement have changed. More and more I speak with clients who enjoy many parts of their work -- the sense of purpose and achievement and enjoyment of the value of their contribution. Yet the discussion of retirement returns, most often in response to the things about work that are on the negatives list. Lengthy commutes, long work hours, changes in the workplace culture -- all tend to take a toll over time.
Here are the top reasons why Americans choose to work longer:
Life expectancy has increased. Many workers do not have enough retirement savings to cover the additional time.
Workers are healthier and more educated, plus jobs are less physically demanding, so more are willing and able to work longer.
The notion of retirement work is increasing in popularity - rather than retiring, workers are choosing to phase out of one career and move into another
There are a number of factor that influence this decision:
Securing a happier and more financially stable retirement.
Benefits -- on top of your paycheck -- employer paid life insurance, employer contributions to a 401(k), and health insurance which can be more affordable than Medicare and provide more comprehensive coverage. This is especially the case if your spouse is under 65 and covered by your plan.
Bigger pension -- those fortunate enough to have a pension that hasn’t been frozen may get a bigger payout for working a few more years, as they’re calculated on pay and years of service.
The rewarding aspects of a job, including the relationships, the recognition and the sense of fulfillment. These provide purpose and structure - especially for men.
During the process of planning for a secure retirement the resources needed are identified, and sometimes those goals are not met by age 65. Remaining on the job allows your retirement savings to accrue interest while also deferring expenses.
Full retirement age for Social Security varies depending on the year you were born from 65 - 67. It rises to 67 for folks born in 1960 or later. For everyone born after 1943, each year you delay taking the benefit you get a bump of 8% in your benefit until age 70. It makes sense to wait till 70 to collect the bigger benefit.
Most spouses want to retire within a year or two of each other -- with the added leisure, home-alone syndrome can be avoided.
Average Retirement Ages for Last Year
Analysis of U.S. Census Bureau data found that the national average retirement age is 63 years old. At the state level, it ranges from 62 to 65.
The truth of the matter is that retirement is an individual decision, and as many folks approach the subject of what a fulfilling retirement experience entails -- less of some things, more of other things -- determining the plan that fulfills those goals can be a challenge.
It’s one of my favorite things to work through with my clients. We are happy to have the conversation at any time, and as I always advise, the earlier the better, to ensure you are in line to retire at 65 like a boss, however you might want that to look!