If you’re concerned about not having enough money for retirement, you’re not alone. According to Gallup’s most recent annual survey on Americans’ financial concerns, 64 percent of Americans are worried about their financial readiness for retirement. In fact, retirement has been the No. 1 financial concern every year since Gallup started conducting the study in 2001.1
For many workers, there’s an easy solution to their problem. They can simply work in retirement. Some workers may plan on staying with their current employer but transitioning to a part-time role. Others may look for all-new part-time employment after they retire.
There are certainly compelling reasons to plan on working after you retire. That income may help you take lesser distributions from your savings, allowing your assets to last longer. You may also be able to delay filing for Social Security, giving you a chance to increase your eventual benefit.
While working in retirement may seem like an easy solution, you may not want to count on work to fund your golden years. That’s because it may not be up to you. Many retirees assume they can work in retirement but then find that it’s not a realistic strategy. Without any other plans in place, they’re left with reduced income and perhaps a challenging financial reality.
If you’re counting on work to help you overcome your retirement savings gap, you may want to reassess your plans. It could be feasible for you, but it’s wise to have a backup strategy in place. Below are a few reasons why you may not be able to work in retirement:
Think you’ll never deal with disability? Think again. According to the Council for Disability Awareness, 25 percent of all adults will become disabled at some point in their lives.2 Those odds may increase with age. The Centers for Disease Control and Prevention has found that more than 60 percent of those age 65 and over have difficulty with at least one basic function or activity.3
If you suffer a serious injury or illness, you may not have the physical ability to continue working in a meaningful capacity. Many retirees don’t stop working because they want to, but rather, because they have to. There is a real chance you won’t have the physical ability to work in retirement even if you have the desire to do so.
The U.S. Department of Health and Human Services estimates that 70 percent of those age 65 and over will need long-term care at some point in their lives.4 Long-term care is extended assistance with basic living activities such as dressing or eating. It’s usually provided either in the home or in a facility.
Obviously, if you need long-term care, it’s unlikely that you will be able to work. Even if you are healthy, however, long-term care needs could prevent you from working. Consider what would happen if your spouse needed care. Could you afford to hire professional help while you work? Or would you have to quit working so you could provide the care yourself? Again, this is an unpleasant but very real possibility for many seniors.
Right now it may seem likely that you will be able to work in retirement. However, many retirees don’t really know how they will spend their newfound free time until after they’re already retired. Some find that the activities they’d thought were important actually aren’t that high of a priority. They may find a new passion for volunteering, travel or even a new hobby.
Consider that after you retire, you may find something that’s more important to you than working part time. If that happens, will you really stick with your plan to continue working? It would be nice to have other resources in place so you can choose what is best for you.
Rethinking your plan to work past retirement age? Let’s discuss it. We welcome the opportunity to help you analyze your needs and develop a plan. Let’s connect today.
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