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?
I don’t think I’ll ever fully retire, but more just do what I enjoy in life. I would like to do extensive traveling eventually though!
Michelle – traveling sounds fun. We just have to stay healthy enough to do that!
I don’t think continuing to work later in life is necessarily a bad thing. For me someday I hope to be a tenured research producing professor someday which means I’ll probably be working in some capacity into my golden years. I think it has to be more of a case by case. I do 100% agree with you though about planning as if you weren’t going to work any more. I can’t predict what my life will look like at that age but planning for not working is going to ensure that I’ll be set along the way because of the choices I make today. My goal is to be able to retire by 45-55 if I chose too. But we will have to wait and see 🙂
Nunzio – I agree that it’s not necessarily a bad thing. Where I see it as not so good is when somebody plans on needing to work when older. To that end, I think your comments about being able to retire when youg, if you choose to, is great. Admittedly, I don’t see myself on target to retire before 55. But I see this as something that I should step up efforts to try to, as we just never know what can happen when older.
My Dad turned 80 in December and continues to work full time as a freelance architect. Always a supporter of libraries, for the past decade he’s focused his work exclusively on libraries in the state where he lives. He gives them a great rate; sort of his contribution to library’s well being. I think this work has been a factor in keeping him in excellent health, both physically and mentally. Financially, he doesn’t need the income, so his work is a choice. On the other hand, I think planning, due to economic necessity, to be working beyond age 70ish is a setting oneself up for disaster. Health challenges will make this impossible for many. I think one should look at any earned income beyond age 70 as ‘gravy’–a great way to stay active and connected and boost lifestyle, but not an integral part of providing for basic living expenses.
Kurt – I think you’re seeing it the way I do. Planning on working late in life for money needs is quite risky. That’s great that your dad has been able to work by choice, and that it’s potentially been a factor in keeping him in good physical/mental health. I can totally see how that might be a legit benefit to working when older.
The notion of working later in life is just as absurd to me as those who say they’ll retire “young” and travel a bunch. I can’t imagine myself wanting to travel a bunch when I’m older. Even if I’m in good shape, traveling will tire me out. I love to travel, but getting from one place to another exhausts me.
At the same time, I’m not one to tell people what to do. If things go my way, I’ll retire between 60 and 65. That seems suitable.
-Christian L. @ Smart Military Money
Christian – yes, planning to work later in life involves a lot of assumptions about health and the energy to work. Best to be realistic, even when optimistic!
At this point, I’m planning on working until I’m eligible for Medicare, whatever age that will be once I get there (I’m 38 and I know it won’t be 65 for those in my age group). I just can’t imagine most people in the middle class being able to afford their own health care costs for a number of years.
Money Beagle – that’s a real issue, being able to afford our own health care costs. Just another factor to really think about.
I strongly believe that the best time to retire is in your thirties. Not everyone can do it and still too many work way past a reasonable age to retire. Is it poor planning or the inability to save? Who knows, but I hear a lot of excuses. Everyone is not the same! I just wrote an article declaring I will never retire. I won’t work, but I will do many things that I enjoy and I might just earn some money anyway. I can’t seem to stop my fascination with money.
Wow, thirties! Well, I think that sounds great…..though that won’t be feasible in any way, shape, or form in my case 🙂 But really, the earlier the better I would think. I’m interested in why you feel strongly about that particular age bracket.
You are young enough to enjoy the time and you still have time to return to work, if desired. I achieved financial freedom at 38 years old and started some businesses. It help guarantee the future. You have a completely different perspective on what is important in life. I agree with you that the sooner the better!
Thanks for following up and explaining your view. It makes sense to me!
It drives me nuts when financial pundents on television tell people that they need to work until they’re 70 or older. Like you said, you never know what’s in store for your future. How do you even know if you’re going to be able to work until 60 let alone 70.
I think we should all plan our finances as if we may have to retire early and if we want to continue working and making more money then you still have that option. However, planning to be able to continue working indefinitely isn’t going to be possible for everyone.
Justin – yes, best to plan as if we have to retire “early” and then work based on our option to do so.
For me it is more about balance. My aim is to ‘retire’ young, but I doubt I will ever fully be out of the workforce in some way. I am only in my 20’s but am working on setting up income streams to support me so work is a choice, not necessity.
I know some people who want to work into old age, because they feel like they will just stop having reasons to get up etc. I have seen people retire then basically stop living. On the other hand I have uncles who retired young, travelled and love it. I think each to his own.
Kylie – good point, to each our own. I think it’s important for people to be honest with themselves in that regard. Some will want to keep busy working, others can operate better without daily tasks and would rather travel, explore, etc. All I know is that having the flexibility to have that choice is a good thing!
My father and father in law both work and they are close to 70. My husband is planning on working in old age. All for the same reason: Health care.
Jules – health care does play a big role in the decision making of a number of folks, it would seen. Goes to show how expensive and financially crippling health care bills can be without the right insurance, even to the point that people will work with that as a primary motivator.
Many people are opposed to the health care reforms Prsident Obama has been pushing in the USA. To work to have …………………………….health care……………..suggests that Obama is on the right track making it more affordable, isn’t he? Just asking!
Eileen
Sydney, Australia
Quite the controversial topic, with interest across the globe!
It’s good to be aware of the possibilities that may arise. We are as frugal as possible, knowing that having money today doesn’t necessarily mean that we will have money tomorrow. It can be hard to know just how much to save, though!
Wayne – yes, having money one day doesn’t guarantee having it later. I suppose the more we have, the less risk we have of encountering crippling financial troubles.
My parents are in their mid 60s and they are ramping down their work load. Health is a big concern. You can’t do what you used to do. It’s too bad that our healthcare system forces people to work longer.
I think people who says they’ll never retire is a bit delusional. It’s difficult to keep working when you are older.
rb40 – that’s the thing, it’s more difficult to keep working when older. I agree that a lot of people are delusional, and simply don’t get that things change with age. I know I don’t feel the same way as I did when, say, 20!
I really enjoy what I do and though I might not work as long in this career as I think, I can’t see lounging around the house in a moo-moo by the age of 65- I’d be incredibly bored. Knowing that as I get older, health issues can pop up, I’ve stayed very healthy – kept a consistent weight for over 20 years, stay active (I love my bike) and eat nutritious foods. Of course, there’s always the unknown illness that could cripple my health, like cancer, but hopefully I’ll be fortunate enough to not have to endure that illness.
Little House – the key (I think, anyway) is to be able to work by choice, not because we have to. If those unexpected health issues do come up for us, then we would have the choice of what to do. I’m nowhere near that kind of flexibility, but it’s a long-term goal!
It worries the heck out of me when some of my friends simply say that they’ll work longer when I ask about retirement savings. First of all, I don’t think someone’s health is completely predictable. Secondly, companies actively look for ways to replace aging workers. So I am a big fan of trying to be financially independent by no later than 55. I think if someone is lucky enough to be in great shape to work forever, then yay, but why not make it a choice instead of a necessity?
Crystal – very well said.
Surely its a fairly small percentage of the population that is financially independent years before the retirement age?
I plan to work for as long as I can, but out of choice rather than out of necessity! Financial independence is so important, and the earlier you can achieve that, the better. I’m not there yet, myself, but working on getting there. 🙂
OOf…the notion of working forever isn’t such a keen idea with me. I would like to retire early from my main job, but keep going with jobs born out of things I like to do. So in essence, kinda still working, but working for fun and not for money.