Can I Ever Retire?

Ah, for the good old days when the retirement formula was simple. Get a job. Retire at 65. Go home and collect your pension. But those days are long gone. Pension benefits became too expensive for companies to maintain.  They cancelled the plans, started matching contributions to 401(k)s and pushed the burden of retirement savings back on the worker.

But the outlook for retirement in America is different than it has ever been and older American workers are deciding not to retire at the society-appointed age of 65. According to data from Pew Research Center, workers 65 years old and older make up almost 25% of the workforce and the number is growing. Most of those responding to the survey said they are working full-time, and money is the reason. Older Americans don’t believe they’ve saved enough, for lots of reasons.

  • People are living longer, which means they need to save more for their retirement years.
  • For some, the financial crashes in 2000 and 2008 depleted their savings accounts.
  • For some, money intended for retirement went instead to pay substantially higher health insurance premiums created by the Affordable Care Act (ACA).
  • For others, employer savings vehicles weren’t available. Pew Research says the number of employer-sponsored plans has declined, which the study cited as “the most important vehicle for providing retirement income to older individuals after Social Security.”
  • Others are working longer for a larger Social Security check. For every year between Full Retirement Age (FRA) and age 70 the check amount goes up by 8% each year because of delayed credits, not to mention the additional Social Security contributions made while an individual is still in the workforce.

For whatever reason, the fact is, most people don’t have enough to retire.  A recent study from the National Institute on Retirement Security found that the median savings among all American workers, not just those with a retirement account, is $0. Nearly 60 percent of working-age individuals don’t own a retirement account.

Waiting to retire could be worth it: As the number of older workers in the labor force increases, so do their wages. Data from the U.S. Census Bureau showed that between 1994 and 2005, average monthly wages for those over 65 increased by 80 percent, to $4,092. That far outpaced any other age demographic.

When will you retire? Can you retire? The answer requires preparation and advanced planning.

Alhambra Investments can help you with your retirement planning. Call us today for a free consultation. 

Bob Williams


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