A recent study of working Americans says that 23 percent of those workers plan to work into their 70s, up from 16 percent in 2009. What’s driving this jump?
Economic experts quoted in news sources cite changes in retire plans offered by employers as one possible explanation. In years past, the pension plan was common. These “defined benefit” plans, a specific amount after working an established number of years for the employer, have been mostly replaced with “defined contribution” plans. These newer plans set the parameters for how employees add to their accounts, say a 4 percent contribution each pay period, and what the employee draws during retirement is not a guaranteed amount.
Given this increase in employees who acknowledge they will be working into their 70s, those of us committed to retiring well before that age need to ensure that we don’t lose sight of that goal. When the viewpoints of our co-workers, friends and family change, we can be influenced by hearing about these new norms. Don’t get caught up in accepting that you too should consider this a natural part of life. There is no reason to buy into this idea.
This change is not due to employees loving their jobs. For those surveyed who anticipated working into their 70s, a whopping 40 percent they felt stuck in their jobs. Compared to the group that expected to retire at age 65, the number dropped to 28 percent of workers felt they felt stuck in their job.
What is the solution? If you do not want to be a slave to a job you hate into your 70s, get working on socking away and investing as much as you can right now. Cut back on ridiculous spending. Invest in assets that will increase your cash flow. That annual cost-of-living raise isn’t going to amount to much if that is the only money you earmark toward investments. This calls for slashing everywhere, investing aggressively and spending your free time differently.
Even if you love your job, start working on an exit strategy. You may have the best job or the most fulfilling work, but it might not be so enjoyable in your 60s and 70s.
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