Changing Our Retirement

    Retirement has changed, and so we need to change our retirement plans?

    I’ve been working over 40 years and I’m not retired yet and it is not because I like to get up to work every day. I would have to agree with many folks these days who don’t retire in their prime retirement time (between 60 and 65); It is plain and simply because I can’t afford to.

    According to Marketplace,older workers(those 65 and up) are staying in the workforce in higher percentages than previous recent generations that hit retirement age. Labor force participation of older workers is at a 25 year high. And for many, the reason is an economic necessity.”*

    Recently a report done by AARP found that nearly half of Americans ages 50 and over have $25,000 or less saved for retirement. Also, it was reported that less than half (44%) are now planning to work part-time after they reach retirement age, and one-third are delaying the age at which they expect to retire.

    Many older Americans have little choice in the matter and simply need to continue working as long as they can if they can.Surveys find that barely 1 in 5 Americans is confident of their ability to support a comfortable retirement – and unfortunately for good reason,” says WashingtonMonthly.com**

    So why is this? Actually, there are many reasons according to Rutledge 

    • Social Security benefits aren’t going to be replacing their income at the rates that they used to in previous generations,”
    • Along with that, people’s pensions aren’t as generous as they used to be.
    • Also, American workers just haven’t saved all that much. In 2014, according to the Federal Reserve, 31 percent of working Americans reported having “no retirement savings or pension whatsoever.
    • Housing values have fallen again.
    • Rutledge and other economists have looked at the kinds of jobs people in their 60s and 70s tend to land. “It’s a lot of people working retail, people working as night watchmen and security guards — jobs that are stereotypically considered ‘old”
    • In addition to this, families are paying more for college instead of saving for retirement. Rising college costs are also taking a toll on Americans’ retirement prospects.** Parents are spending more to send their children to college, and they’re doing so at the expense of their retirement savings. Student-loan debt is one of the major clouds lingering over expectations on retirement.

    A recent survey by T. Rowe Price found that 57 percent of parents say that saving for college is a higher priority than saving for retirement and that 49 percent would delay their own retirement to pay for their children’s college. Moreover, 15 percent said they intend to tap retirement accounts to pay for college. According to Sallie Mae, spending on college costs rose to $24,164 in 2015, up 16 percent from the year before, while contributions from family income and savings rose to $10,365, surpassing scholarships and grants as sources of funding for college.

    This growing burden of student debt – including for those in middle age – is also squeezing out people’s ability to save. As of the end of the second quarter of 2015, student debt was the largest source of household debt after home mortgages, with $1.19 trillion outstanding (compared to $703 billion for credit cards).

    More than half of college graduates between the ages of 18-39 expect to be able to retire on time, followed by college graduates aged 40-64 (49 percent) and those aged 18-39 without a college degree (45 percent).*** Overall, Millennials are much more optimistic than their Baby Boomer predecessors now nearing retirement.

    With all of this information, I feel the need to take a proactive approach to “creating” my retirement income. This is the reason for doing Wealthy Affiliate. So before I retire and settle for what  my retirement income is going to be according to past investments, although they are small, and investment losses, although they were big, I am working on creating a new income for my retirement years. One I can control, work anywhere on, and increase as my retirement goes on.

     

    *”Many boomers can’t afford to retire” by Mitchell Hartman with Marketplace

    ** “Why You Can’t Afford to Retire” by Anne Kim from WashingtonMonthly.com

    *** “When Do Americans Think They’ll Actually Retire?” by Janie Boschma in The Atlantic