Rethinking Retirement: Why 70 Is the New 65
Gone are the days when turning 65 meant you were on the cusp of retirement. For many Americans today, the retirement landscape has changed dramatically, causing a shift in how we view the so-called “golden years.”
Is 65 Still the Magic Number?
According to recent studies by the Transamerica Center for Retirement Studies, the modern reality looks quite different from what previous generations experienced. A staggering 40% of surveyed workers plan to work longer and retire at an older age, primarily due to economic conditions. Even more eye-opening, 13% do not intend to retire at all. It may be time to rethink your plans if you’re banking on retiring at 65.
The Financial Realities of Retirement
Several factors contribute to the rising retirement age. One main reason people delay retirement is the financial support of adult children. In a poll by CreditCards.com, 74% of parents reported financially assisting their adult children with living expenses or debt. Add increasing medical costs and concerns about economic stability, and you have a cocktail that makes immediate retirement less feasible for many.
The Social Security Dilemma
Then there’s Social Security — a key income source for retirees. The age at which you start collecting benefits can significantly impact your monthly checks. For instance, if you start collecting at 62, you’ll get about 30% less than if you wait until your full retirement age (67 for those born after 1960). Waiting until 70 may earn extra credit, boosting your monthly amount even higher.
So, let’s say you would normally get $1,000 a month at age 67. Start at 62, and you’re down to $700. But holding off until 70, you might get as much as $1,320 monthly. Hence, many financial advisors recommend waiting to collect benefits, especially if you’re healthy, expect a longer lifespan, or are a higher-earning spouse.
Staying Relevant in a Changing Workplace
The idea of retirement itself is evolving. Longer life expectancies mean that, for many, the prospect of “doing nothing” isn’t enticing. With more years to fill, career longevity brings financial benefits and offers a sense of personal satisfaction.
However, staying in the workforce may require you to upgrade your skills. The younger generation may be more tech-savvy, while those entering their golden years may need to catch up. Learning how to use modern communication tools like social media or mastering new software may make you more marketable and keep you intellectually stimulated.
Planning for the Unexpected
Let’s be honest. Uncertainties can throw a wrench into even the most meticulously planned retirements. You must have a backup plan, whether for an unexpected health issue or a sudden job loss. Your retirement planning should include contingencies for these sudden events, such as saving more than you need or considering alternative income streams.
Final Thoughts
Retirement planning is no longer a one-size-fits-all proposition. It’s a complex puzzle that involves financial planning, projections about your lifespan, and even predicting the economic needs of your dependents.
Free retirement seminars at community colleges and online resources may be beneficial, as can consulting with a trusted financial advisor.
The reality is that for many people, 70 is the new 65. Whether by choice or necessity, working longer is becoming the norm. So, if you’re considering retirement, updating your strategies to align with this new reality is crucial. Your future retired self will thank you.
- Changing Landscape: Retirement isn’t what it used to be. The notion of retiring at 65 is increasingly outdated.
- Financial Realities: Economic pressures, including the financial support of adult children and rising healthcare costs, are causing many to postpone retirement.
- Social Security Dilemma: Timing when to collect Social Security benefits can significantly impact your retirement income. Waiting until age 70 could substantially increase your monthly benefits.
- Staying Relevant: In a rapidly evolving job market, skill upgrades and lifelong learning are essential for those wishing to extend their careers.
- Planning for the Unexpected: Life’s curveballs may0 derail even the most carefully laid plans. Having a backup strategy is essential for a secure retirement.
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