Having to work in retirement can tarnish your golden years

Having to work in retirement can tarnish your golden years
Eileen St. Pierre, The Everyday Financial Planner

Recently I was asked to help a gentleman in his mid-80’s with job placement assistance. At first, my reaction was “That’s nice, he wants to keep on working.” No, I learned that he HAD to work. I was so shocked by his situation that I failed to probe deeper on how he got himself into such a financial mess. But he wanted to accept responsibility for it and pay back the debts he owed.

RetirementSignWideMore of us are saying that we plan to work longer and delay retirement.

This plan may sound reasonable now, when we are in the prime of our lives. We have more debts to pay and are way behind in saving for retirement. But the reality may be far different according to the 2015 EBRI Retirement Confidence Survey of workers and retirees age 25+:

  • Just 9% of workers say they plan to retire before age 60, compared with 36% of retirees who report they retired that early.
  • 16% of workers plan to retire between the ages of 60-64, although 29% of retirees retired in that age range.
  • A large percentage of retirees leave the work force earlier than planned (50% in 2015).

If you do need to work during your golden years, have reasonable expectations.

My client had circled some jobs in the newspaper. I asked him how much extra money he would need to make each month. Then I determined how many hours he would need to work at each job at the low end of the stated salary range to meet his goal. It came to about 32-35 hours a week. I then asked him to consider the following questions:

  • Would that many hours even be available to him?
  • Could he physically do it?
  • How would he convince his prospective employer that he could do the job?
  • Does he understand how to apply for this job? Had he ever submitted an online application?
  • Did he understand that there would be a time lag between submitting an application to the day he starts the job? He will not be getting paid right away.

The Bottom Line

I tell this story to get the point across that it’s easier to save now for retirement than to expect to earn money in retirement. You have until April 18 to make your 2015 IRA contributions ($5,500 plus an extra $1,000 for those ages 50+). Keep your golden years from becoming tarnished.