As the financial situation shifts daily around the world, people are wondering if this is a good time to retire. New fears about the future make it appear that one shouldn’t even consider retirement. Whether there are concerns about money, healthcare, or creating a new life, one thing is for certain this isn’t our parent’s retirement.
If you believe the latest press reports, baby boomers have done a poor job of saving and preparing for retirement. The United States does have one of the poorest saving rates in the world. But, is it realistic to expect people to work forty years and simultaneously save enough to fund another thirty or forty years of retirement.
When the retirement age was established in 1934, the age life expectancy was 65. The thinking at the time was if an individual lived that long, it was appropriate to provide a pension to see them through to end of their days. Social Security was never designed to support a majority of the population for a third of their lives.
The model for retirement needs to change. The idea of working thirty or forty years and then not do anything except get a pension is unrealistic. The new extended longevity of life opens up options that need to be evaluated. Deciding on the right time to retire involves a number of factors, not all of them financial.
Like people in the military, police and firefighters, Mark retired from the entertainment industry at a young age. While some of his financial needs were met with a pension, he started a home based business, which allowed him to raise his son and contribute additional income to the family.
Now his son is graduating from high school and Mark is looking for a new challenge. He would still like to earn money from his new endeavor, but the focus is shifting to work that is contributing to society. He is looking for work that is challenge and rewarding, as well as provides income. A reported 77% of baby boomers expect to continue to work, at least part time, past traditional retirement age.
While some will never retire due to financial reasons, many baby boomers are exploring working part time, making a career change to more fulfilling work, starting a business and altering their lifestyle to accommodate new interests. People who experienced a happy retirement report that money was not the primary factor in their well being. Understanding what you need to be satisfied in life is a key factor to plan for the future.