Over the last few years, I’ve read a ton of articles related to personal finance. Actually, I’ve written quite a few articles as well, so clearly this is a topic that captivates me. Most of it is quite interesting to me: the math behind it, and the strategies that can be taken on to both make, save, and protect money.
What’s also interesting is the psychological part of it, in terms of how we view money. Some people are inherently afraid of losing money, and pinch pennies to the extreme. Others are simply obsessed with materialism, and just love spending without worry for the future. One group that interests me is the set of folks that fully expect to work until well past 65.
Now, if someone is 60, for example, I would believe them if they say they expect to keep working. They would probably know defnitively if they were in financial trouble, and would have a good sense of what their general health would be like at the time. One would think, anyway. Or at least hope. The fear of having to work in old age is huge financial motivation for me, to get me to save.
However, if somebody 35 said that they plan to work until old age, I would wonder what would make them so confident in being able to do so. Perhaps it’s that it seems so hard to relate to what it would be like to be older?
The best way to handle this potential blind spot for many of us is to simply look around at people of that age. Some, happily, are very successful and doing some amazing things in the world. We have had presidents over that age here in the U.S., and in recent years have had serious presidential candidates in that age group as well. However, that’s not exactly the norm.
Look at people you know. I know friends whose parents died in that age group. Others simply pass due to unexpected illnesses. Beyond that though, many people come up with all kinds of health issues. Even if there are no major issues, there might be some minor problems or – if nothing else – a lot of aches and pains that didn’t occur in one’s 20’s. I’m not of that age, so I can’t speak from personal experience of course, but I just think that the life experience of people can be different at various stages in life.
So, why would anyone expect to be able to work until later in life? Confidence, as a part of a very positive attitude? Naivete? Evidence that if some people can do it, why can’t anyone do it? I don’t know.
There is also the issue of ageism in the work force. Look at many corporate-type jobs out there, and try to assess the percentage of workers that are in each age bracket: 20’s, 30’s, 40’s, 50’s, and 60’s. Personally, I see that the younger decades tend to be a bigger portion of the workforce. Also, when looking at new hires, how many are younger versus older? Think about what you tend to see.
I would say the safe bet is to assume that we will be unable to work in old age, perhaps unable to find work, or maybe really not wanting to spend our time needing to work. Plan on saving for being out of the workforce out at a certain age well before 60, and then not having a job for many years while you live a longer lifespan than prior generations.
If we are lucky enough to have an opportunity to work while in that age group, and enjoy what you could do, then working because you want to is a different story. But planning on working because you think you’ll have to, and banking on that income to support us then, seems very risky to me.
Best to plan for what might seem like the unexpected, and set a target date for retirement savings which is much earlier than standard ages. Then, save and invest accordingly 🙂
My Questions for You
What do you think about the notion of people planning to work until later in life?
Does this bother you or cause any concern?
At what age are you targeting to be out of the workforce – by choice or force?