It used to be that a lot of people were confident they’d be able to retire comfortably one day. Funny thing was, even in those good old days, far fewer people were actually taking the necessary steps, like saving enough money.
Today, things have changed. More people are facing the fact that they’re behind on their retirement savings, and that’s changing their expectations.
According to a recent Gallup poll, a little over half (53 percent) of all workers believe they will not have enough money to retire comfortably—up from 32 percent who felt that way in 2002. And, according to a survey from the Employee Benefit Research Institute (EBRI), 33 percent of today’s workers expect to retire at age 70 or older—way higher than the 9 percent who thought they’d have to wait that long back in 1991.
Getting Financially Prepared to Retire
A good starting point to prepare for retirement is to calculate how much money you should be saving. According to the EBRI, just 42 percent of today’s workers have run the numbers on retirement. Interestingly, those who have expect to need more for their retirement than those who have haven’t, and they feel more confident about their ability to meet those needs.
Apparently, instead of being overwhelmed by a number that’s larger than expected, knowing their number motivates people to save more.
One of my favorite online retirement calculators is Fidelity’s myPlan Snapshot (click on “See how much you may need to save for retirement”). By plugging in just five numbers, you’ll see how much you’ll need and whether you’re on track. After getting your “snapshot,” you can get a more detailed estimate by clicking on “Create a plan.”
Getting Emotionally Prepared to Not Retire
The research about people pushing back their expected retirement date doesn’t say whether they’re happy about it. I’m going to take a wild guess and say probably not.
For the last 50 years or so, people have looked forward to retirement as a time of leisure. And if you’re working a job you hate, sleeping in every day probably sounds like a better alternative.
However, there’s a lot of evidence that when people stay engaged in work they find meaningful during their later years, it’s better for their relationships, their health, and their happiness.
So, it would be healthy for us to rethink retirement, maybe even retiring the idea altogether (sorry). We’ll probably need the money and the benefits that come from continued work, and we’ll be happier, assuming we find something worthwhile to do.
Still, there’s a danger in counting on a longer career to make up for any retirement savings shortfall. We may not be healthy enough to work for pay. That’s why we should do both: prepare emotionally to never retire, while preparing financially to retire at 70.
What are your retirement expectations?
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