Insights & Advice


Why retire?

Back in the day, retirement was equivalent to that golden ring on every small town carousel. It was your reward for a life of hard work, saving and struggle. Today, like that disappearance of the carousel, fewer and fewer Americans see retirement as an attractive alternative to working.whyretire

Let me first state that this is a general trend and is not true for everyone. There are people who just can’t wait to retire, or are forced to because of health or other reasons. I could argue that those who hate their jobs should simply find another one that is more to their liking, but that may be easier said than done.

A new study from Bankers Life has shown that 41% of Baby Boomers are not only still in the workplace but plan to work beyond age 69. I’m one of them. Your first thought may be that people like me need to continue working due to financial fears. That would not be the case.

Those of retirement age who have chosen to remain employed say it’s not about money. Six out of 10 of us argue that we work for nonfinancial reasons (although a paycheck never hurts). People like me continue to work because we want to. Of those surveyed, 18% believe working keeps them mentally sharp while another 15% claim their job keeps them physically active. Others (15%) argue that working gives them a sense of purpose.

All of the above reasons pertain to me. I love what I do. Money management, talking, visiting and advising clients, helping others achieve their financial goals, and writing these columns are for me the quintessential dream job. It also helps that the firm that employs me is probably the best employer I’ve ever had and I’ve had many in my career. It helps too that my wife works here as the President of the firm (and my boss).

Unfortunately, in the same survey, 72% of those questioned who were retired, regretted it and would like to rejoin the labor force. However, due to their age, or because of health conditions, that option appears closed to them. It also highlights another problem.

The future of Social Security benefits in this country is a contentious issue. Many believe that the retirement age should simply be extended and that will solve all our problems. What we fail to realize is that as workers grow older, their prospects for increased wages, promotions and job training decline substantially. Once most employees reach the 55-59 years of age bracket, their prospects for gainful employment are also slim.

Pushing out social security benefits from, say, 62 years old (the minimum age one can retire) to 65 may sound like a good solution, but will simply compound the dilemma for aging workers. I could see a situation where more and more workers are laid off or can’t find a job at age 62, but can’t collect social security benefits for several more years.

Another study commissioned by Allianz bank recently discovered that 82% of Baby Boomers and the Gen X generations believed traditional retirement was a romantic fantasy. Some believe that 70 or 80 years of age is the new 65. In my case, that may be true (as long as my health lasts) but for many Americans, not so much. The best advice I can give those of retirement age is to work for as long as you can. Find another job and, if you want, reduce the number of hours you work, but by all means continue working. You will live a longer and happier life if you do.

Posted in Financial Planning, The Retired Advisor