People consistently over-estimate their ability to work in retirement, and they don’t count on working longer to save enough for retirement. The basic assumption is that you will just continue doing what you are doing. Or perhaps take a retirement package. Maybe you will continue working on contract or even a new career. In fact many people actually accomplish this and work as long as they wish to. The sad fact is that the vast majorityÂ end up with no job. Or working at low paying service jobs that barely provide for their needs in retirement.
Don’t Count on Working Longer to Save Enough for Retirement
A variety of situations can occur that get in the way of continuing to work during retirement. These include just not being able to find another job. This may be caused by sickness and poor health, lack of motivation and falling behind the curve of your industry. This later example happens to many people. They are out of the work force for a period of time. Then try to get back in only to find that technology, systems and processes s have passed them by. They are no longer current and they do not really have the inclination as well as the drive to keep up. As a result they are passed over for younger more up to date candidates.
Layoffs, down sizing, industry closings all lead to job changes at the very least and being out of work when you least expect it. Sickness in your family or yourself can also get in the way. What are consumers supposed to do to deal with these situations.
There are many solutions, some obvious some not so much. The one thing that is most important is to save for a rainy day and save for retirement. Plan to retire at age 50 and if you decide to work longer, that’s fine, at least you have the funds available to allow you to be flexible and enjoy life. Save as if you are going to retire young and also have a rainy day fund available for emergencies. If you cannot find a job, get sick or just do not feel like going to work, at least you can live comfortably.