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Here’s the No. 1 Reason Seniors Work Well into Retirement

October 14, 2019 · Retirement Life

A recent poll has looked at the retirement situation in America, bringing to light some particularly upsetting finds. While we typically think of retirement as a sort of relaxing, golden period of our lives, it turns out that statistically, it’s not fantastic for everyone. 
Out of 10 retirees, 6 have admitted to working into retirement for financial reasons and while that sounds pretty disheartening, wait till you hear the more specific reasons behind this choice. 
Seniors aged 65 to 85 claimed that they simply couldn’t afford retirement and without at least a part-time job, they’d be struggling day to day. Keep in mind that some still even worked full-time in order to stay afloat. Another big reason behind this phenomenon is the fact that they need to work to support their families, which also sheds an interesting albeit disheartening light on our economy. 

The issue of debt is also a very big reason why so many retirees choose to stay in the workforce. Owning money pushes a lot of people into work well beyond their full retirement age and their savings and Social Security simply cannot keep up with it. 
Emergencies, coupled with health care costs can spring up at any moment and keeping up with everything can feel daunting and impossible without a working wage to back it all up. Some seniors might be doing alright financially, but that may also be because of workplace benefits. Without them, some have claimed that they’d simply not be able to remain stress-free. 

A senior woman reviewing retirement savings and financial documents at home.
A focused senior woman reviews her financial documents and savings charts at her kitchen table.

Savings overview

The number everyone’s talking about in 2019 when it comes to health-care costs is $285.000. That’s not a small amount and it feels especially daunting when the study also showed that on average, seniors had saved $133,108 for retirement. That’s not even half of what’s supposed to last through medical care alone, not to mention any other expenses. 
Seniors rely on their workplace to cover a chunk of health, life and disability insurance, so a lot of times leaving the workforce is simply not an option.
Financial advisors typically say you should have 8 times your starting salary by the time you turn 60, so keep that figure in mind when you’re planning out your retirement. 

 

If you find yourself in the same situation, here are a few things to keep in mind:
1. Always keep an eye on your money. Don’t just look at your saving accounts every once in a while. You should stay on top of any investments and profit-sharing plans, not to mention employee stock ownership plans from your office. 
You should always be aware of every last dollar, including any benefits you’re entitled to. That’s why it’s crucial that you’re aware of your full retirement age, calculated based on your birth year. So don’t take just anyone’s words on when that is and look it up for your own as some people might experience it sooner or later even if they’re close in age.
2. Stay on top of your required minimum distributions. You could face as much as a 50% penalty if you forget about your RMDs when it comes to 401(k) and individual retirement accounts. So, no matter the amount you avoid withdrawing will see a 50% cut unless you’re still working. 
There are some confusing exceptions, though. You must still withdraw if you own 5% or more of the company, for example. As far as IRAs go, you also have to withdraw whether you’re still working or not. 
So don’t lose sight of what you can or can’t avoid depending on your personal financial situation.
3. Planning for retirement is more than the numbers in your account. Everyone’s retirement is different, there’s no doubt about that. Sometimes it seems natural to just go with the flow and take hints from everyone else around you, but if you want to be fully prepared, consider speaking to a financial advisor.
They can help you look at your situation from the outside while giving insight on what you should expect and what you shouldn’t worry about. Some retirees can become so stressed about their monetary situation that they forget about certain benefits, requirements and even their inheritance plans. 
An outside opinion could help put you at ease. 

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