Do you remember the days when retirement planning was simple?
You would leave school, spend your career working for one large employer, and then retire on your 60th or 65th birthday (for women and men, respectively) before enjoying a few quiet years with a guaranteed income arriving in your bank account each month.
For most people retiring in the future, those halcyon days are long gone.
The decline of defined benefit (final salary) pensions, especially in the private sector, rising life expectancy, and challenging economic and investment market conditions in recent years mean retiring at 60 or 65 is an ambition too far for many retirees.
Working later than the traditional retirement ages of 60 or 65 is often heralded as the solution to securing a decent income in retirement.
There are lots of benefits of continuing to work into your late sixties and well into your seventies. In addition to the economic benefits of working longer, it can have a positive impact on your health and social life, giving you a sense of purpose in what could otherwise be a unfulfilled retirement.
But what if you don’t have the choice to work for longer?
It was interesting to read a study from the US which found 60% of retired workers said they had to stop working unexpectedly.
This was a study carried out by Voya Financial which spoke to over 1,000 recent retirees.
29% of those surveyed said the timing of their retirement was “somewhat unexpected”, while 31% said the timing was “very unexpected”.
33% of those respondents said they left their jobs involuntarily.
This involuntary retirement was for a variety of reasons; 16% were forced to retire because of health problems, 11% retired because they lost their jobs, 3% had to stop working because they needed to care for a spouse or dependent, and a further 3% were forced into retirement because of their age.
The important message from this survey is that you need to save as much as possible for your retirement, while you are able.Click to tweet
Don’t put off retirement planning until tomorrow, with the notion that you will definitely be able to continue working a few more years to fund any shortfalls.
The reality might be an unexpected retirement prompted by poor health, a lack of employment opportunities or needing to care for family.
You can’t always choose your retirement age. You can however plan for a range of scenarios, to ensure you and your family are financially secure in later life.