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February 25, 2015
Retirement is not what it used to be. In the past, retirees could get by on a combination of Social Security payments, their company’s pension, and their retirement savings, but this model is slowly fading. Now, many people don’t have enough to fund their retirement and find that they have to work during this time to continue to support their lifestyle.
Many People Lack the Funds to Retire
According to a recent survey, one third of people in the United States have no retirement savings at all. Though most people are aware that they don’t have enough saved, they may have trouble finding extra income to set aside. Those with little or no retirement savings often cite cost of living and day-to-day expenses as reasons for putting off saving.
“We’re living much longer. It’s a double-whammy. We’re saving less than ever at the very time we need to be saving more than ever,” notes Ric Edelman, financial advisor, author and radio host.
With the uncertainty of Social Security and a move away from company pension plans, more and more of the financial burden for retirement is being placed on individual savings. As the times change, so does the way we need to approach financial planning for retirement.
Factor the things you’ve always wanted to do into your financial plans so that you can make the most of your retirement.
Working During Retirement
All of these circumstances raise the question, will you have to work during retirement? If you don’t have enough saved to support your lifestyle after retirement, you have a few options. Edelman addresses four choices for funding your retirement:
• Begin contributing more money to your retirement fund.
• Invest in higher-risk investments, hoping that you can compensate for your lack of savings with higher returns.
• Put off retirement, and continue to work.
• Do a combination of the three.
You may very well find that you have to work part or full time to support yourself in retirement. Some people are already settled into retirement when they realize they will have to go back to work to afford the lifestyle that they have grown accustomed to.
Many people find that working in retirement gives them a new sense of purpose.
“If you see yourself living on a meager income, and if you haven’t saved enough to boost that figure by retirement age, the best solution is to change your financial plan. Set new goals,” says Edelman.
Edelman’s advice for making the most of working in retirement is to find something that you love doing. It’s not too late to find employment that you enjoy, even if that means starting a new career. If you find yourself just working to pay the bills, consider working with a career counselor to find a new job. A renewed sense of job satisfaction can help ensure that your retirement years are satisfying and well spent.
He also suggests that working during retirement does not always mean you will have to work 40 hours a week for the rest of your life. If you plan effectively, you may be able to transition from working full-time to part-time, and eventually just a few hours a week to keep busy and boost your income.
In the end, it’s best to be prepared to meet the financial challenges that retirement brings. Make sure that you plan with an eye toward the future, rather than looking at what’s worked in the past. It’s never too late to start saving and planning for a successful retirement. If work factors into your plans, make sure that you choose something you enjoy.
Use a retirement calculator to find out how long you need to wait until you retire. And browse 41 Ways to Have a Healthy, Wealthy and Happy Retirement for inspiration for your own retirement (some work can make actually you healthier, wealthier and happier).
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