In times of economic uncertainty, many are wondering if retirement will happen at a later and later age. Whether you are worried about combatting losses in retirement accounts or you are just wanting to make your funds stretch further, you might think retiring later is the best topion. While this may sound like the most logical option, it isn’t always the most effective strategy.
According to the 2022 EBRI Retirement Confidence Survey, there is a considerable gap between when a person expects to retire and when they actually retire. In fact, 47% ended up retiring sooner than they had planned. (1) Retiring earlier is not always your choice. Some employers may lessen your hours, provide an early retirement incentive, or you may have health issues that force your hand. In short, even if you want to work longer and save more, there’s no guarantee that you’ll be able to do that.
Let’s look specifically at a few reasons why retiring later is not a reliable strategy.
Unexpected Health Problems
Even if you are healthy today, you never know what will happen in 5, 10, or 20 years. As you age, your health can suffer. Working longer is not a guarantee, as 34% of retirees in 2021 were forced to retire early due to a health problem or disability. (2)
Your Company Downsizes
It is incredibly disheartening if you are in the last few years of your career and your company downsizes, leaving you in the dust when you were counting on the income to provide for you in retirement. In fact, 25% of retirees were forced into early retirement due to changes at their company. (3) At this stage of life, it’s challenging to find another job when interviewers know you will be retiring soon. While you can keep your skills sharp and take measures to prove your value to your current employer, you just never know what will happen to your company as the years go on.
Your Family Needs Your Help
Your loved ones are aging right along with you. Even if your health is excellent and your company still needs you, you may need to step back from the workforce earlier than planned to take care of a spouse or other family member. Your family comes first, so you don’t want to feel the pressure of working just to have enough in retirement if the unexpected occurs. It’s not fun to plan for contingencies like this one, but having a proactive mindset can provide you with peace of mind.
You Might Just Need a Change
When you’re in your 50s and still have years to go before you retire, it may seem simple enough to push out your retirement date from 65 to 70. But what happens when, at 63 or 64, you can’t imagine working for another six or seven years? If you were banking on working until 70, you might not have enough saved.
The younger you are when you retire, the more energy and health you’ll have to enjoy retirement. Many retirees regret spending their best retirement years grinding away at work. Sure, they had more money when they finally did retire, but they had less time to enjoy it.
Since you can’t predict the future, how should you plan?
Start With a Plan
At the end of the day, you may be able to retire when you want to, but wouldn’t you rather know now that you are doing everything you can to be successful and comfortable if you do need to retire earlier than planned? You’re never too young or old to start taking action and planning for your future, be it 5 or 20 years down the road.
At 1on1 Financial, we specialize in guiding working and retired professionals, executives, and business owners along the path to financial well-being. Our goal is to help you generate income, preserve your life savings, and strategically plan for retirement. If you want to review your retirement plan with us, call our office today at 909-981-1720 or simply click here to schedule a free 15-minute introductory phone call!
About 1on1 Financial
1on1 Financial is an independent financial advisory firm specializing in guiding working and retired professionals, executives, and business owners along the path to financial well-being. Founded in 1997, we use a team approach to help our clients accumulate wealth, generate income, preserve their life savings, and strategically plan for the distribution of their estate. With more than 50 years of combined experience in the financial services industry, we remain true to our fundamental mission: to provide personalized guidance, treatment, care, and service so our clients can gain control of their future and feel confident in their financial life.