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Work is a critical component of the Retirement Income plan

Thinking that retirement should be triggered at a specific age is outdated.  Longer life expectancies mean retirement may last for 30 years or more.  Today’s age 65 is the equivalent to the mid to late 70’s for your grandparents. Go out at 65 and you may spend nearly as many years retired as you did working.  That is expensive!  Plus working longer is feasible as modern work is less physically demanding and careers are more personally fulfilling than in the past.  

  • Many plan to work during part of retirement. The rewards are abundant: financial, professional, social and psychological, and so on.
  • Some will be forced to leave the work force earlier than planned due to poor health or to care for a spouse, economic downturns, corporate downsizing or other work place dynamics, etc.

With more and more women participating in the work force, when to retire has become a joint decision. While most men view retirement as an opportunity to spend more time with their beloved, their wives may be hitting their stride professionally—having sacrificed career goals early on to meet the demands of raising a family.

To maximize your earnings prospects in retirement, engage in career planning and keep your skills relevant. Job satisfaction plays a huge role. As we get older we have less patience for B.S. Resist impulsive and irrational desires to quit before you can really afford to do so.

Work may be what you are doing today, different work or different work requiring similar skills.  Consider consulting, part-time work or a "phased retirement”.


NOTE: Many employers offer incentives to retire early. Keep in mind that what is in their best interest may not be in yours. The sweeteners for an early exit are often seductive, but make sure you can afford it in the long run.

 

Of working retirees:

  • 31% work for the same employer
  • 40% a different employer
  • 27% are self-employed
  • 45% are doing the same work
  • 26% are doing different work
  • 33% are doing work that is entirely different

Rethink retiring before you can afford it. How far will you have to reduce your standard of living? Is that realistic? What goals are you willing to compromise?

Remember, extending your working career is one of the most important decisions you can make to ensure you don’t outlive your assets.  The decision to continue working may impact your decision regarding when to claim Social Security benefits.

 

<NEXT:  Phased Retirement>


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