Ok, so you know how I’m always talking about the fact that saving is important because you never want to run out of money in retirement? And you know how I’m always saying that you want to spend your retirement years doing the things that you love, rather than having to settle for a minimum wage job just to make ends meet? Well, there’s a really good reason for that… You see, the idea of what it means to retire has changed drastically over the last decade.
It used to be that the average person worked three or four decades, earned Social Security and pension benefits, and just retired at the age of 65. Things were simpler, retirement planning was easier, and medical care didn’t cost as much. But we don’t live in the same America anymore. People are living longer, medical costs are skyrocketing, and Social Security is facing major issues, which include potentially running out of money in about 20 years. Unfortunately, the financial troubles of the last decade or so didn’t help either… Ruined nest eggs, layoffs, and the slowing in our economy all added to the mix of troubles.
But there’s an even bigger problem looming, and few are taking steps to address it seriously. The wave of retiring baby boomers just started to grow, and over the next decade or so, it will become a tsunami. Like it or not, America isn’t just facing a fiscal cliff, we’re facing a retirement cliff, when an entire generation of retirees will have to deal with a brand new reality of lower pension benefits, longer lifespans and skyrocketing medical costs.
Over the last few years, I started to notice an interesting trend when talking to women about these issues. Many of them are seriously considering continuing to work part time after retirement, so that they can supplement their pension and Social Security benefits. But what I’ve found over and over again, is that they have completely unrealistic expectations of the future! Many of them are confident that they will just get some nice little part time job somewhere so that they make the extra income they need, while still being able to enjoy themselves. But they don’t realize (or maybe don’t want to realize) how difficult it could actually be for a retiree to find a decent part time job.
For example, there’s age discrimination to deal with, there is a lack of technological skills that will likely lower your chances of being hired once you already exited the workforce, and you will also probably have to take a huge pay cut from what you were making before you retired. If your plan is to work after you retire, you absolutely have to keep this in mind and be realistic about your future.
For example, a recent USA Today article showed staggering statistics on this subject! According to the article, 60% to 80% of pre-retirees are sure that they’ll work after retirement. Yet only about 18% of people over 65 are actually working! Realistically, what do you think happens to all the other ones who thought they’d find a job, but didn’t? Did they find a mini fortune and no longer need to work? Or did they have to drastically change their lifestyle just to make ends meet?
That’s why I always say: you don’t want to depend on anyone during your retirement, except yourself. Not your Social Security benefits, not your children, and not the hiring manager at a company where you want to get a part time job after retirement. The only one you can depend on is yourself, so make sure to take the steps that you need to protect yourself, and don’t wait too long. Remember, when it comes to building sufficient income for yourself during retirement, time is one of your biggest allies.