Why people are retiring later, working after retirement and staying busy after age 65 October 5, 2024
Ah, retirement. good life. Make sure you get your pension when you turn 65. No more alarm clocks or worrying about what your boss will think.
In the past, this was the norm. But today, many people continue to work past the age of 65. This may be because they have to, or because they want to work, or both. And when people end their careers at age 60, 65, or 70, they may change jobs or find something new part-time rather than leave the world of work.
According to the Pew Research Center, roughly one in five Americans over age 65 will be employed in 2023, nearly twice as many as were employed 35 years ago. Additionally, the Employee Benefit Research Institute reports that the median retirement age for Americans is 62 years old, but the 2024 Retirement Confidence Survey found that three-quarters of workers will continue to maintain their salary after retirement. It turned out that I thought it would work for me.
I work because I want to
Many factors influence how we think about retirement. Ranging from those exploring more interests, to those losing potential social and business connections they have built, to those worrying about whether they will have enough money to live on. is wide-ranging.
“The definition of retirement is changing,” says Dennis Prout of Prout Financial in Traverse City. “(When I retire) I’ll probably work as a consultant or work part-time.”
That could include anything from bookkeeping for a small nonprofit to a retail job at your favorite store. “You have talent,” Prout says.
Or something you wanted to pursue but couldn’t due to financial constraints during your prime money-making years. Today, there are people who consider themselves retired but still work, volunteer, or consult part-time. “Everyone has a different definition of work. Later on, you have more freedom, which you didn’t have 30 or 40 years ago,” says Prout.
And some people continue to enjoy their current jobs even after their 60s. Maybe they don’t want to do it as much, but it’s still fun to go to the office. “Do I want to retire at 65 or do I need to retire?” That’s a great question (for people) to ask themselves,” Prout says.
There’s even better news for older workers. Their earning power has increased in recent decades, according to the Pew Research Center. In 2022, the typical worker age 65 and older will earn $22 an hour, up from $13 an hour in 1987.
The potential benefits of delaying retirement include everything from larger Social Security checks to IRA-related tax breaks to employer-paid health insurance. Part-time workers enjoy the security of a little extra income, but even unpaid volunteers benefit from the social connections and mental sharpness that comes from being active and engaged outside the home. You can.
work because you have to
Of course, a big part of the retirement equation is money, especially concerns about whether you have enough savings to get by beyond Social Security.
When pensions disappeared, they were replaced by personal savings, 401(k) plans and other personal accounts, Prout said. “They take some responsibility for their own retirement. There’s no pension anymore.”
The Center for Retirement Initiatives at Georgetown University points out that people are living longer, and longer lives mean more years in retirement. A national poll conducted by the National Institute on Retirement Security shows that working-age Americans are becoming increasingly anxious about retirement, putting pressure on individuals to plan and save accordingly. Understood.
Prout says you should start planning for retirement early, if not sooner. “The[money]savings are huge. You have to start. Don’t let negative self-talk stop you,” he says.
His second mantra is to manage your debt. And do that first before trying to accumulate wealth in other ways. Many credit cards carry interest rates as high as 20%, so if you have credit card debt, you should pay it off before starting a 401(k) savings plan, he says.
The amount of money you need to retire has to do with a variety of lifestyle factors. A Northwestern Mutual study found that employees are aiming for $1.46 million in retirement living expenses over 25 years, or an average of $58,400 per year. However, according to the same study, the average American adult saves only $88,400 for retirement.
retirement up north
So what does retirement look like if it doesn’t look like it used to?
For almost any retirement experience, look no further than Friendship Center of Emmet County, the county’s designated aging council. The primary location is in Petoskey, with a satellite location in Brutus. Executive director Deneen Smith said the seniors who take advantage of the center’s activities span a wide range of ages and interests. (Michigan law and the Elderly Act consider an elderly person to be someone 60 years of age or older.)
More than 1,300 people have signed into the Friendship Center at any given time, Smith said, and Petoskey averages 150 users per day.
The Petoskey hub location includes administrative offices and is the home of the Meals on Wheels program. She said it has four buses to transport seniors and also provides home services such as housework, personal care and respite care for caregivers.
On the other hand, many of the people who take advantage of what Friendship Centers have to offer are active retirees or non-retirees who want to enjoy the social aspects of the programs the Centers offer. .
“Social activity is so important to us,” Smith says, noting that older adults can be isolated and being active with others can improve mental health. Activities range from yoga to kayaking, lectures to hikes, lunch to card games, and more. A staff of 37 people across two locations offers line dancing, movies and many other options.
Both Prout and Smith point out that age-related changes don’t necessarily have to be negative. “Life expectancy has increased. People are living longer, healthier lives,” Smith says. In Emmet County, about a third of residents are over 60, she said.
“We can now live relatively healthy and long lives,” agrees Prout. “My clients are active cyclists who are over 70 years old. They have accepted retirement, but they are still active.”
Bottom line: “Everyone is different,” says Prout. Every situation has never been more different.
