What Pre-retirees Need to Know About Timing Their Retirement
If you’re nearing retirement age and panicking about the fact that you don’t have enough saved to enjoy a comfortable retirement, you’re not alone. Generally, those between the ages of 50 and 65 are in denial about how much they’ll really need to have saved to maintain their current lifestyle after they retire, and much has been written about how many of the Boomers aren’t saving enough.
I spend a lot of time playing with various retirement calculators. It’s universally acknowledged that the single most effective thing pre-retirees can do make their retirement savings last is work longer. Some estimate that every year a person continues to work can add up to four years to their retirement income.
I haven’t heard or read much about the drawbacks of working too long - until I saw this piece by Toddi Gutner in the Wall Street Journal.
The article does a nice job of concisely explaining why retirees need to carefully consider the consequences of working part time - especially if they are fortunate enough to have a pension.
As a side-bar, I bet we see a lot more boomer-favorable DB/DC plan legislation passed over the next several years.
Stumble it!
May 3rd, 2008 at 10:38 am
Thank you for this - I find this topic at the top of my financial focus these days as I am going to marry a guy who is 47 and I’m 37 - and our 401Ks are seriously underfunded. We’ve agreed that our primary focus for the rest of our financial lives is to save, save, save. It helps that we enjoy a relatively simple lifestyle so saving doesn’t seem to hurt us. I found this interesting in the article: “four million people between the ages of 62 and 65 were drawing Social Security benefits; about 1.6 million were working at least part time.” Almost half! That surprised me. I want to keep working only because I can’t stand the thought of retirement. I’m hoping this baby boomer generation will make it easier for us that follow to work out better ways to retire.