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By Al Chingren - August 13, 2018
Delaying retirement is trending these days. In fact, 38 percent of workers expect to retire at age 70 or older. Is it in vogue or a necessity? The reasons can vary, but what may be most important is that you plan ahead so you have the choice.
Many who decide to keep working are motivated by concerns about having enough money, while others may simply want to stay active. There can be many factors to determine if you should (or need to) work longer. Let's dive into a few of the most common.
People can expect to live longer. Below are life expectancy statistics for men and women today.
Source: Social Security Actuarial Life Table. The period life expectancy at a given age for 2015 represents the average number of years of life remaining if a group of persons at that age were to experience the mortality rates for 2015 over the course of their remaining life.
However, it's critical to note that it's not just about age. They can expect to be healthier, too. Researchers have found that a significant number of older Americans, including those age 85 and older, are healthy .
Health is one factor why a growing share of Americans are working beyond their 65th birthday. The number of men ages 65-69 in the workforce declined to its lowest point in 1985 and has steadily risen to 37 percent in 2017. For women in the same age range, the amount staying in the workforce increased to 28 percent in 2017.
Source: Bureau of Labor Statistics, Current Population Study.
If your retirement savings are not where they should be, or you're concerned about covering unforeseen expenses, working longer may be a good option. For example:
Another contributor to postponing retirement may be debt. Researchers found a "dramatic increase" in the amount of debt carried by older Americans nearing retirement (ages 55 to 61), resulted from them "having purchased more expensive homes with smaller down payments than previous generations." Their research showed:
"Choosing" to work longer versus "having" to work longer will tell two very different stories for those who stay in the workforce beyond age 65. Planning now may help you retire when you want to, not when you have to.
Here's are the first few steps to help you begin:
One of the most important, but often overlooked, steps in preparing for retirement is to visualize what you want it to look like and to prioritize your goals. That includes answering questions such as: Where do I want to live? Will I travel? What can I leave my family?
Establishing a clear picture of your future can help more accurately assess your needs and create a realistic retirement budget. This is a critical step in retirement planning and can help you understand how much you may need to save. It can also help you decide which goals you may need to defer or eliminate.
The third step in planning is to determine how you will invest the money you put aside for retirement and when you will start drawing from it and other retirement benefits. Questions you need to consider include:
To discuss what path may be best for you, please give us a call at 1-800-345-2021, or review these strategies. We want to help so you can live the kind of retirement you dream of.
Some expect to stay on the job longer to save more for retirement, pay down debt and have extra money for daily expenses.
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The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.