Why Retirement Ain't What It Used to Be
Retirement used to mean a phase in life where you stopped working and slowed down. But more and more that definition doesn’t seem to fit. Many people are working well into their golden years, by both choice and necessity. For those who haven’t saved enough money to retire, this means working to pay the bills. But some people continue working for fulfillment. They may try a new career, continue at their current company or go part time. No matter which they choose, retirement isn’t the right word anymore.
For those born in 1960 or later, the government defines full (or normal) retirement age as 67. But turning 67 doesn’t necessarily mean you are willing or able to retire. In fact, it is a growing trend in the U.S. to continue working beyond the government-assigned retirement age.
Many believe that this trend could result from lingering effects of the recession as worker’s assets declined and they had to withdraw from general and retirement savings to get through the difficult period. Another possible reason more Americans are likely to work through retirement is the shift from pensions to 401(k) and other retirement plans.
These types of plans give people more freedom in how to invest their retirement savings but they also require more work. Some people don’t sign up for a retirement account at all, while others don’t contribute enough to make retirement possible.
Plus, there are some benefits to working later when it comes to Social Security. While you can start getting payments at 62, they will be reduced. If you wait until that normal retirement age of 67, you’ll get full benefits. But you can also get a benefit increase by delaying even longer, all the way up until 70.
The other problem many people are encountering is not saving enough for retirement or pulling out money before you reach retirement age, which can result in penalties. A 401(k) loan has a lot of downsides. If you have good credit, a personal loan could be a better option. (You can get your credit scores for free every month on Credit.com to see if your credit is good.)
Health is also improving overall and in many instances people are working longer since they live longer. This is both because they have to support themselves for a longer time and also because they have years of time to fill with activities. Continuing to work can help you stay mentally and sometimes, physically, active. It can provide a sense of self-worth and allow for new social connections. All of these can help keep you healthy into your golden years.
Other than continuing your career past retirement age, which many Americans do, there are new options that come at this stage in life. Consulting in your field may offer more freedom than your previous job while allowing you to capitalize on your experience. Starting a new path in retirement can also allow you to pursue a passion you weren’t able to focus on during your previous career.
Those that pursue a new project might find it rewarding to start a business, write a book or focus on other labors of love that they may have dreamt about while in the traditional workforce. Turning a hobby into something lucrative can be extremely rewarding. Others may be motivated by a job that gives back to the community or society at large. Working as a nurse, patient representative, for a charity or in local government are just examples of the many fulfilling opportunities out there. Some people even choose to work retail, in the service industry or with children. These can be part time so they provide some structure but allow more free time as well.
Whether you are itching to throw in the towel or still get excited on the way to work, it is hard to know how you will feel when retirement time comes. You will hopefully be able to save enough that you will not need a job in retirement, but even if that’s the case, you may find you want one.
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AJ Smith is an award-winning journalist with more than a decade of experience in television, radio, newspapers, magazines and online content. She currently serves as the managing editor for SmartAsset. AJ has a passion for meeting new people, sharing stories and helping others. She has degrees from Princeton University and Mississippi State University. AJ and her husband also write and illustrate educational children’s books.