More and more Americans plan to work well into their 80’s. This trend stems from financial concerns, not necessarily a desire to keep golfing at 82.
Many Americans face a significant drop in retirement income compared to what they make in the workforce. Living on $25,000 or less per year is far from a dream retirement.
People may feel stuck working longer because they can’t afford to retire. Here’s why:
- The ‘Great Recession’ hit hard: When the economy crashed, saving for retirement was pushed aside. Instead, many people focused on basic needs and things like fixing up their homes.
- Savings gap: In 2024, nearly half of the people at or near retirement age only have about 25% of the recommended amount saved.
- Blind spot: Many people have no idea if they’ll have enough saved and they’re also way off on how much they’ll need for healthcare.
The message is clear: Guesswork and wishful thinking won’t work. Here are some action steps that can help you plan for retirement.
- Ditch the guessing: Calculate your projected retirement needs and factor in inflation and healthcare costs. Consider seeking professional financial advice to get the clearest picture possible.
- Start saving now: Every dollar counts. Automate your savings, prioritize essential spending and make saving money a non-negotiable part of your budget. Remember, compound interest is your friend and time is needed to make it work.
- Go beyond Social Security: While Social Security offers valuable support, it won’t cover your entire income. Explore retirement accounts like IRAs and 401(k)s and consider taking advantage of any available plans through your employer.
Working until your 80s might seem like a long way off, but the choices you make today may determine your future. Take control, plan ahead and build a financially secure future you can truly enjoy, no matter what age you choose to retire.
