Let’s talk about the trifecta of disaster.
Big 3? Recent research shows that many Americans are forced into retirement sooner than they imagined. What’s worse, they have no idea how much they need to save to live comfortably in retirement. They also don’t have a clear idea of how many years they will need the funds after retirement, putting them at risk of running out of funds.
Let’s start with involuntary retirement.
According to a recent Edward Jones, study, 40% of customers were forced to leave the company. “Life is full of surprises and it doesn’t end with retirement, so it’s not shocking at all,” Jennifer Schoonmaker Dash, an Edward Jones financial advisor in Lexington, North Carolina, tells Yahoo Finance. Ta. There are many reasons for this, including company downsizing and, most commonly, personal health issues. “
it is investigation A survey released earlier this year by the Employee Benefits Research Institute (EBRI) and Greenwald Research found that there is a significant gap between when current workers expect to retire and when retirees say they actually quit their jobs. It has been found. Workers continue to report a median retirement age of 65, while retirees say they retired at an average age of 62.
Workers may even say they will retire at age 70 or older. One in three workers expects to retire at age 70 or older, or not at all, but only a small percentage actually retire that long.
I don’t want to think about it
The immediate fear of being forced into retirement earlier than expected is compounded by the fact that many people do not plan properly.
For many people, saving for retirement prediction gameaccording to, investigation Produced by the nonprofit Transamerica Center for Retirement Research (TCRS) in collaboration with the Transamerica Institute.
Roughly one in five workers of all generations, including baby boomers (24%), Gen We estimate that we need to save. But almost half of the workers who provided estimates said they were just guessing.
They don’t even want to accept the idea.
Approximately 4 in 10 workers agree with the statement, “I don’t want to think about or worry about retirement investments until I get closer to my retirement date,” with 13% strongly agreeing and 29% somewhat disagreeing. I answered that I agree. (Gen Z and Millennials are even more likely to agree than Gen X and Baby Boomers.)
How long will I live?
In addition to the three worrying obstacles, many Americans don’t realize how long they can go. potentially alive. Just over a third of Americans know the average life expectancy of retirees, according to a report from the TIAA Institute and the Center for Global Financial Literacy Excellence at George Washington University Business School. And he knew the correct response to the question only 12% of the time. basic quiz Designed to measure longevity literacy.
On average, a 65-year-old man will live to age 84, and a 65-year-old woman will live to age 87. In addition, a 65-year-old man has a 30% chance of living at least until he is 90 years old, and a man has a 30% chance of living until he is 65 years old. – A woman aged 40% has a 40% chance of reaching that criterion.
make ends meet
In other words, retirement can be a big problem for workers without a plan. An Edward Jones report found that when preparing financially for retirement, clients’ biggest struggles include developing an income withdrawal strategy (35%) and determining the best time to claim Social Security benefits (35%). 35%).
One solution is to say sorry and get back to work. Nearly all of the advisors surveyed by Jones said they had talked to or would like to discuss how clients return to work after being forced to leave their jobs. According to financial advisors, the most important benefits of working after retirement are staying mentally active (99%), earning health insurance benefits (99%), and gaining purpose. It is about feeling conscious (97%).
This idea of continuing to work in some way, even if you’re forced into retirement, isn’t that far-fetched a concept for most workers.
According to a study by Transamerica, 55% of workers plan to continue working after retirement, with 18% planning to work full-time and 37% planning to work part-time. Similarly, workers across generations plan to continue working after retirement, including 53% of Gen Z, 56% of Millennials, 54% of Gen X, and 55% of Baby Boomers.
“It’s becoming increasingly common to talk to clients about what it’s like to work in retirement and what their goals are,” Schoonmaker-Dash said. “Everyone is different at the peak of their career, but the right employment opportunities can provide financial stability and help give retirees a sense of purpose.”
My biggest takeaway from these studies is that saving for retirement is not something young workers can just jump into. You’ll probably live for decades after you retire, but “retiring” sooner than you expected is often something out of your control.
What you can control, especially when you’re young, is to save at least a small amount and contribute as much as you can to your employer-sponsored retirement plan so that it’s automatically added to your pot salary every time you get paid. After that, we will steadily increase the percentage we donate each year.
If you don’t want to think about saving for retirement, why not think about it as saving for life? Life savings, now it sounds a lot nicer.
Kelly Hannon is a senior reporter and columnist at Yahoo Finance. She is a workplace futurist, a career and retirement strategist, and the author of her 14 books, including “The World’s Best.”Taking Control Even Over 50: How to Succeed in the New World of Work.” and “You’re never too old to get rich.” follow her on her twitter @Kellyhannon.
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