Planning for retirement in the United States is something that most of us do, but as time has passed, we live longer than ever and are much healthier as we age. This means we can work longer and be productive for more years than ever before. The pandemic accelerated many things like online shopping and working but it has also pushed folks to retire faster. Research shows that 39 percent of people who are pre-retirement age now anticipate retiring before age 65. This is a higher percentage seen than in any other year since 2010. 18 percent say they plan to retire by age 59.
When it comes to your social security, retiring at 67, rather than waiting until you are 70 means you are paid less each year. Compared to someone who is 70 and receiving maximum benefits you are worse off. Waiting until you are 70 increases your benefits by 8 percent annually until you reach the milestone. However life is short, and the pandemic has shown a lot of folks that lifestyle and time with family are important.
Waiting until you are 70 years old just isn’t good enough for some of us. “Our clients feel that time is ticking and they want to experience as much of life as they can while they have the energy to do so,” says Rafe Klein, Senior Vice President of David Lerner Associates in Westport, CT. An estimated 11.5 million American households with an earner under the age of 55 say that they “aspire to retire by 55”.
Aspiration is one thing but being able to do it is another. “Retiring at 55 means you will have to make sure you have enough saved and/or invested so that you can enjoy the rest of your life carefree,” Klein says.
Setting aside money each month is not enough, you will have to get your budget together and work out what assets you have and how much you owe on any mortgages or vehicles. This is the rest of your life and the lives of your partner or loved ones. Some Americans want to “work full-time as long as health permits” but if you want to clock off one final time and sail off into the sunset, you’ll need a solid plan to retire and achieve your goal.
This reversal of the retirement trend to retire later may have its roots in the pandemic but it will have far-reaching effects in the future. Time is one thing you can never get back and it seems that Americans are taking it more seriously than ever.
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