Retiring at 65? Think Again

News today is 68 is the new 65, meaning folks hoping to retire by the time they hit 65, may be in for a less than pleasant reality. Without enough money saved or if their investments took bit hits in recent years, it may be their only option is to continue working for a few more years.

More Time to Save

Everyone works their entire lives with the focus on saving money for their retirement years. Many envision fishing, traveling and hanging out with their grandkids.

Unfortunately, that’s just not an option these days for many Americans. Stacy Francis, a financial planner in New York City sums it up this ways,

68 is definitely the new 65. Delaying retirement leaves a worker with fewer years of retirement to finance, more time to save and earn returns, and higher Social Security benefits if they delay taking them.

That’s certainly not what many want to hear. The numbers don’t lie, though. One survey conducted a few weeks ago revealed almost 40% of American workers are already planning on delaying their retirement – and some are expecting to delay it by as much as three years. Now, many financial analysts are actually encouraging it.

“If you can keep your job, yes, work longer,” advises Frank Troise, a senior portfolio manager at SoHo Asset Management in San Diego. Citing what he refers to as a “financial trifecta” that includes income, expenses and investment returns, he says if any of those go “off kilter”, then it will require modification in other areas, which, of course, explains why many are planning now to add another few years.


Another problem many baby boomers are facing is the risk of losing their jobs, said Troise. Not only are they not receiving “income appreciation”, but they’re at “serious risks of not keeping their jobs. Since income is not a variable they can control, if they’re also now reassessing their market returns, the only other variable they can control is their expenses.”

The flip side, though, is that the longer we work, the more we’re contributing to our retirement plans – thereby improving longevity. Other analysts say delaying social security benefits is an added bonus. You could easily increase your Social Security benefits by 8% a year. But is it worth it?

“We had big plans. We’ve been planning a trip around the world for as long as we’ve been married”, said one 64 year old man who’s just now delaying his retirement.

I’m tired. I can’t keep up with those young folks and the fast moving technology,

he said. “I’ll be damned if I fold, though.”

He said he plans to work another two years until he reaches full retirement age for Social Security benefits. “I’m out of here in two years and eight months” he declared. The fact is, he was quite disciplined in his efforts of saving and preparing. He and his wife both worked hard, saved their money and raised their children with the end goal in mind: that cruise around the world.

Good News

The good news for our would-be retiree and others in similar situations is the benefits will mostly be tax exempt. So even though they’re working longer, they’re also going to be able to keep more of what they get, too.

For those who hold out until they’re seventy, they can expect almost double the Social Security benefits had they retired at sixty-two and for many, that’s worth a few more years punching the time clock.

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