(Photo credit: Maxim Hopman at Unsplash)
I’ve written a lot about the “reinvention” of retirement. What used to be a one-size-fits-all process — you hit 65, you stop working — has now fragmented into multiple solutions.
You retire “on schedule” at 65, just like previous generations.
No you don’t, keep working.
No you don’t, you semi-retire but have a side gig.
No you don’t, you retire but then come back into the labor force with a new (and possibly quite different) job.
It’s an “all of the above” world now.
When looked at through a behavioral lens, all this is an exciting feature of the longevity revolution. It is inspiring to think of people who can still be productive into their 70s, 80s, 90s or even beyond. I need make no apology for my cheerleading.
At the same time, though, I have to acknowledge another side of the coin — the grim reality that many people near or at the traditional retirement age have no choice but to keep working because they are seriously underfunded for what lies ahead.
“The good news is, you’re doing to live a lot longer.” “The bad news is, you’re going to live a lot longer.”
According to this article,
Millions of Americans nearing their golden years are still financially unprepared for retirement. According to U.S. Census Bureau data, 50% of women and 47% of men between the ages of 55 and 66 have no retirement savings.
What’s the answer? “…experts said it is not too late to make a plan. According to the AARP, that includes continuing to work, lowering your cost of living, saving when you can and delaying social security benefits until age 70 in order to get the largest monthly check possible. You should also avoid risky investments that you think will make up for the lost time.”
The situation in Canada is similar. The age break here, that I was able to get hold of, is 55-64 (not 66). I looked at total savings and investments excluding the home, and found that 16% of the people in that age range have literally zero, and a further 32% have less than $50,000 saved up.
What we’re seeing, in sum, is a confluence of forces all driving toward an aging of the workforce and an eliminate of retirement-at-65 as the default:
From an attitudinal point of view, even people with plenty of money want to keep working because they understand it keeps them younger, more engaged, more relevant. Remember the world’s oldest doctor, that I wrote about on this blog recently, who said, “Retirement is the enemy of longevity.”
Okay, but at the same time, a significant number of people have no choice but to keep working because they are dramatically underfunded for a “traditional” retirement. All the more so, given the devastation inflicted on so many retirement savings portfolios with the stock market wipeout we’ve just suffered. And all the more so, yet again, given the fact that funds will be needed to support an ever-longer lifespan.
And at the same time, there is a critical shortage of younger workers, leading to more companies taking a serious interest in retaining and recruiting older workers. This “serious interest” approaches “crisis-level interest” in some countries like China. Longevity combined with collapsing birthrates insures that this will not be a short-term trend.
Don’t forget to check out SuperAging.info
We’re now only a month or so away from the official publication of SuperAging: Getting Older Without Getting Old, the book I co-wrote with Larry Wolf, and I hope you’ll visit our website to find out more and, hopefully, to preorder in either the hardcover or digital format. (Audiobook coming soon as well).