I read this interesting article on yahoo finance yesterday titled
Why ‘I’ll just work longer’ is no longer a good retirement plan. Some of the statistics listed in the article are pretty sobering. It’s a nice reminder for us to stay focused.
The number one reason most individuals put off retirement is money. When you combine longer lifespans, stagnant wages, low savings rates, and poor health, it's easy to understand why many people stay in the workplace. A recent study by Merrill Lynch found that 3 out of 4 workers in the U.S plan on working part time after they hit retirement age.
For many individuals, working longer seems to be the only way to make it through retirement.
"I'll just keep working."
The trouble with this reasoning is that it may not be possible for you to work longer. Half of retirees leave the workforce much sooner than they expected. People over 65 make up only 5.4% of the working population.
60% of retirees retired earlier than expected due to unforeseen health problems. Other retirees are forced to retire due to job layoffs. Older individuals may find that it is difficult to get hired, because they lack the current training experiences and skill sets. 1 in 3 workers have saved less than $1,000 for retirement.
Saving and investing consistently is the best way to reach your retirement goals. Track and manage your spending. When your retirement accounts reach a value 25 times your annual expenses, it's safe to retire. Simply "working longer" shouldn't be your only plan. Marrying rich or winning the lottery isn’t a realistic retirement plan either.
Look at your own financial situation and net worth. Are you happy with where you’re at financially? I’m not.
Are you just going to work longer? We don’t want to.
My biggest regret is that we didn’t start investing sooner in our careers. This being said, we have a plan in place and are working relentlessly to make up for lost time to reach financial freedom.
We have a plan in place and are working relentlessly to reach financial freedom.
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