So What If I Will Never Be Able to Retire?

by Vered DeLeeuw · 19 comments

When Social Security was established in 1935, the average US life expectancy was 60 for men and 64 for women. Now, it is 75 for men and 81 for women even accounting for a one-year drop across the board due to the pandemic.

This means that women and men were pretty much expected to work when the Social Security system was created ‘till they dropped. Today, men can expect to live about ten years beyond retirement age, while women can expect to live 15 years after they stop working.

This is a significant development.

This positive development explains why the Social Security system is heading towards an eventual restructure. Unless early retirement is eliminated and the normal retirement age keeps getting raised, Social Security is going to run out of money sooner rather than later.

Feeling Left Behind

We’ve been through a lot lately. It was a year ago when everybody thought the world was ending. Economies were being shut down, and central banks around the world were so scared the economies would collapse that they held emergency meetings after emergency meetings to think of ways to throw money into the system. The plan largely worked. One year later and the picture is practically a complete 180. Nowadays, it seems like everybody is getting rich all around us. It was the Tesla stock speculators a good few months ago. Then it was those who cashed in during the Gamestop craze. And let’s not leave out the Bitcoin crowd. One of my friends got into these cryptocurrencies 18 months ago and he’s already talking about retiring in a few years from his crypto portfolio. Good for him!

On the other hand, there are just as many people who got spooked by the possible collapse and subsequently lost out on one of the fastest rebounds in history. What does retirement look like for those who cashed out near the bottom and missed the run-up, especially when their damaged nest egg is coupled with unprecedented longevity? It means that some of us will need to work longer than the “normal retirement age” of 66.

You can retire at any time between 62 and 70 as of now, with your benefits prorated to reflect your age. If you retire early your check will be smaller, and you will receive more if you wait until 70. When it gets down to it, picking a date to start collecting your benefits is basically a gamble on how long you are going to live. But on average, if you expect to live until around 75, retiring from paid work and starting to withdraw benefits at age 62 is probably not the smartest move, financially speaking.

What If You Want to Work – But Can’t?

As if the situation isn’t complex enough, another issue is that even if you want to keep working, not all employers will be open to employing older workers. As we’ve discussed before, age-based discrimination is unfortunately fairly widespread. And even if the practice illegal, there are ways to make it appear as if the company is simply downsizing, and not necessarily getting rid of older employees.

The solution is twofold. You need to save enough for a possibly long retirement. You also need to find a way to make money well into your seventies by starting your own business or by working part-time. You might not make much, but that extra income plus your savings and social security benefits might be what it takes to help you live comfortably and avoid running out of money.

What Are People Like You And Me Planning To Do?

In an interesting discussion on Facebook, I asked my Facebook friends, “Will you be able to retire?” The answers I received were interesting, and definitely reflect a change in the way people look at retirement:

“We’ve planned for non-retirement.”

“I never really expected a stereotypical retirement of just hanging out doing whatever seemed fun at the moment, traveling, supper at 4 pm, and all the rest. Instead, I see some form of engaged activity until I keel over, and I would expect that some of that produces a way to continue providing for myself. Whether it’s income from a book I’ve yet to complete, a garden I tend for my own groceries, or maybe even some kind of part-time employment I can’t yet envision… Whatever it is, it’ll be because I enjoy it. I refuse to fear the future.”

“I’ll be working as long as I can, then living on Social Security after age 70.”

“I don’t have a plan. I’m winging it from month to month and am confident that I will manage somehow. I’m great at getting by on very little when I have to. Maybe I should be more worried about money but truthfully, I’m grateful for my health and am doing what I can to invest in that.”

“We planned for early retirement and made it. However, with rising prices, and other reasons, working periodically keeps us from having to tap into our savings without having to adjust our standards of living.”

Society Will Need To Adjust

With longer life expectancy, more and more people are not planning to ever retire. It’s not necessarily bad news – keeping active and alert and exercising those brain cells may actually mean better, healthier aging. But this will require a shift in the way our society views older people. Instead of expecting the over-65 crowd to politely disappear into some sunny retirement community in Florida, we should accept that people can be an active, contributing part of society for as long as they wish to be.

What about you? Has your nest egg zoomed up like gangbusters? Or are you afraid you’ll never retire?

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{ read the comments below or add one }

  • teez says:

    Has anyone given thought to retiring abroad? The US will forever get more an more expensive.

  • Amanda says:

    Must be nice to be able to “just save”. I am a teacher in the south and my retirement – through the state retirement system will not be enough to even pay rent here. I would love to “save” but my income is such and the cost of living have increased so much that I am living pay check to paycheck. I am just getting out of a relationship where my future was stable, or so I thought. Now I am terrified.

  • EdG says:

    If you can predict that you will only live until exactly 75, then you are actually better off taking ss at 62. Use the chart shown here and multiply by number of years until 75. I think the real break even is about 78. Sure if you like your work, work! If you don’t, try downsizing, moving somewhere cheaper and banking the difference, and really look at each expense to see what can be cut.
    You can’t always get what you want, but if you try sometimes you just might find, you get what you need(Rolling Stones).

    • David @ says:

      I’ve heard it said this way “If only we know when we will die, then retirement planning is easy!”

  • Common SenseGuy says:

    Here’s a crazy idea – live within your means, and save a dollar here or there for the future. Silly isn’t it? Do you really need a new iPhone and the $80+ bill that comes with it per month for data to play Words with Strangers? Me thinks not. How about this (here comes the crazy talk) – you simply spend less, and save more? I’m not talking about retiring wealthy, I’m talking about paying your bills and increasing your net worth through smarter living. If the rest of you sheep want to work your entire lives away or sit at home hoping that Social Insecurity will feed you some day, you can have it. Stop spending money you don’t have and make better decisions, and oh by the way, take responsibility for your own prosperity. (End crazy talk).

    • marci says:

      Oh. Soooo exactly. What I’ve been trying to say. Quit spending your retirement now. Save it instead.

    • Steven Pearson says:

      Common SenseGuy I couldn’t agree with you more. In fact reading your post was as if I had written it myself. And if that’s crazy talk then I’m as loonie as they come. I’m about to celebrate my 6th year of retirement and have been doing exactly as you said. I still say I’m saving for my retirement and feel more financially secure now than when I was working. As you said I didn’t retire wealthy but I do think we are doing pretty darn well.

  • Stephanie says:

    It’s rough for older job seekers, that’s for sure. My dad is in his early 60s, lost his job, and there’s just hardly anything out there for him, despite his education and the qualifications he has kept up. No one wants to hire someone his age.

    As for me, if I get good enough at my business I don’t know that I’ll want to retire. I like keeping busy and if I’m happy at it, why quit?

  • Joeseph says:

    I think retirement is more a problem for the blue collar workers than white. Health concerns can put a huge kink in the works if you have a physical job that you can no longer actually do. White collar work seems a little less punishing on the body, as well as more doable with certain health issues. But I don’t think of retirement the way many people used to, either. It’s good for the soul to be useful–at any age.

    • Sue says:

      Thank you for addressing this, I work in manufacturing and my hands are about shot, (I’m 60). It seems all the advice about aging in the work force completely forgets about us invisible people. We don’t earn as much as the white collar workers so being unable to earn adequate income and afford health care is scary indeed. Why did I not go to collage and make something of myself? Not everyone has the financial or intellectual means to do so. And you are so right about feeling useful.

  • Joe says:

    I think it’s better to find something that you like to do and make some money at it. That way the nest egg won’t deplete as quickly. A part time job or some kind of free lance work is the way to go.

  • M.B. says:

    Our social security income provides more than enough for the daily expenses my husband and I have. We have some retirement savings and investments that we use for frugal traveling, often with a tent.

    Our healthy lifestyle does not include many visits to restaurants, especially fast food ones. I make meals, often vegetarian, from scratch and bake low-sodium, low-fat breads, rolls, and cookies. Many household items and most of our clothing are purchased at thrift or discount stores.

    Fortunately, we live in a community where we can walk or use public transportation. This allows us to save on fuel so we have some extra money for the traveling we enjoy.

  • Emily says:

    Retirement is a relatively new concept in human history–very new, as a matter of fact. Find work you love and you won’t want to retire, anyway.

  • marci says:

    Just learn to live on less – it’s really that simple. Pay everything off, be debt free, and the Supplement from Social Security should be plenty, especially when added to your savings, etc.

    Remember it is SSSI – Social Security SUPPLEMENTAL insurance.

    It’s about NOT needing to make more money cuz you don’t NEED to spend it.
    Simple as that.

  • Justin says:

    I hope we start to see more retirees embracing some form of entrepreneurism. I don’t plan on stopping work really, but I intend to be working on my own terms (which I am working towards now) as opposed to being forced to find some part time hourly work. Helping aging boomers, that spent decades working for somebody else, find a way to start some sort of income supplementing business of their own could end up being a very interesting space to explore.

  • Dominique @Dominique's Desk says:

    It’s a scary thought that we may never have enough for our own retirement and have to work till we die.

    • vered says:

      This is exactly my question Dominique – IS it scary? Historically, unless you were wealthy, you worked for as long as you could. “Retirement” as in “A decade or two of leisure” is a relatively new concept, and perhaps unsustainable.

  • Witty Artist says:

    If you love your work and do it out of passion you won’t see retirement and financial planning as scary as most people do. It’s important that we have a plan, but it’s also important to be flexible and open-minded to new possibilities.

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