In two years, over 25 percent of the labor force will be over the age of 55. It seems that there are many reasons that people who have reached retirement age are still working. This is probably because Baby Boomers, a generation of people born between 1946 and 1964, will need a substantial sum set aside to keep themselves afloat when they do choose to retire. However, most of them haven’t saved enough money to quit the daily grind.
After all, 40 percent of retirees rely on social security checks to pay for the majority of their monthly needs, but this organization only provides a small percentage of one’s post-retirement salary. Another problem is that many of the older people in this age group have only saved half of what they feel like they will need to maintain their quality of life during their retirement years and people currently are living longer than they ever have before. There’s also the fact that the government hasn’t saved enough money to adequately cover everyone’s social security checks.
Many Different Reasons Why
Perhaps the most common explanation for this generation’s current lack of funds is the fact that Boomers got hit rather hard by the recent recession and these individuals are still attempting to recover their lost funds. After all, their pensions and retirement plans took significant hits during those years.
But some of their problems may also arise from the fact that members of this group are currently helping out others: their adult children who can’t find jobs and elderly parents who need increasing amounts of expensive medical care. Many have even chosen to pay for their children’s college tuition at the expense of their own retirement funds.
There are additionally some individuals in this group who simply haven’t worked long enough to collect government benefits, even though they have reached the official retirement age. One columnist went so far as to say that her generation just doesn’t know how to retire. Fortunately, there are companies that are working phase-out programs into their corporate schematics to help ease older employees into retirement.
In addition, social security currently offers incentives for people who don’t start collecting retirement checks (continue working) until they are 70 years old. Of course, there’s no harm in continuing a career if for those who love their jobs and don’t want to quit. Unfortunately, problems arise when people reach retirement age and would like to retire but simply can’t afford to do so.
How To Avoid Problems
The best prevention for this potential problem is to invest in retirement accounts at a young age. Even if the contributions are small, over time, individuals will reap the benefits. Older investors may additionally want to speak with their financial planners about portfolio allocations.
However, for those who can’t retire, it’s a smart move to look around for jobs that they will still enjoy and are still physically capable of accomplishing as they age.
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