We’ve probably all seen a variety of jokes based on the “good news-bad news” theme, which has been around a long time. Some of them even lean more than a little toward the depressing or macabre side. As I’ve said before, I’m essentially an optimist (or as I like to call it, a realistic optimist), so I tend to enjoy and pass along those that steer more toward hopeful or genuinely amusing situations. Sometimes that approach requires a fairly large amount of flexibility and imagination. In the case of the subject of retirement planning, even I can’t find something amusing to say about it; hopeful is a bit of a stretch but not totally out of reach. In November I wrote a post called “Recession & Retirement,” and today’s post is by way of revisiting that topic from a slightly different angle.
The good news is, people are generally living longer these days. The bad news is, people are living longer! Generations ago, the present concept of retirement didn’t even exist. People basically worked until they physically couldn’t any longer. Current and recent generations, however–which probably includes you–face the prospect of planning for a future when they’re no longer working but still need a decent income to meet expenses and provide a reasonable quality of life (I’m not talking around-the-world trips here).
To quote a recent article by Emily Brandon on U.S. News & World Report, “How Long Should I Work Before Retirement?“: “The age workers expect to retire has increased from an average of 60 in 1995 to 66 in 2011, according to a Gallup poll. The proportion of people aiming to retire early has plummeted from 50 percent in 1995 to 28 percent in 2011.”
Yes, there are at least a few, according to Brandon’s article. They include giving your assets more time to grow, taking advantage of tax benefits (IRA contributions, etc.), receiving a larger Social Security check after retirement (if it’s still around when you retire!), and accessing potentially better or more affordable post-retirement health benefits (e.g., Medicare).
Is there a downside to the idea of delaying retirement in order to minimize the amount you have to save up to cover expenses after you retire? Certainly. For one thing, you might not have the option of delaying it if personal circumstances force you to leave the work force early. In another scenario, you might leave one job for another and find that the new position doesn’t work out, so you’re back in job search mode at an age when circumstances can tend to make reemployment more challenging, especially at or near the level you held when you left.
Like anything else, this is not an easy situation to consider and plan for. Inevitably, you just have to do the best you can, make the wisest career and financial choices you can. Starting now would not be too soon!