Retirement is a relatively new concept. It was all but unheard of prior to the 20th century, and it didn’t become common in the United States until the advent of Social Security in 1935. Since then, retirement has changed and evolved in a number of ways.
Up until a few years ago, most workers expected to retire by age 65 and enjoy a life of leisure. But the economic turmoil of recent years has led to numerous changes in retirement trends.
Here is some retirement advice to consider about the changing trends of planning your retirement.
People are waiting longer to retire. In years past, it was common for older workers to take early retirement, even though they would receive reduced retirement benefits. These days, more people are waiting until they reach full retirement age, and even working beyond that. While some do so because they enjoy working, many simply can’t afford to stop because of high healthcare costs, inadequate savings or other economic concerns.
Full retirement age for Social Security purposes is increasing. Currently, full retirement age is set at 66, up from 65 for those who retired prior to 2003. For those who were born between 1955 and 1959, full retirement age will range from 66 and 2 months to 66 and 10 months. And those who were born in 1960 or later will have to wait until age 67 to receive full benefits.
Traditional pensions are becoming extinct. In decades past it was common for employers to fund pension plans for their employees to supplement their Social Security income upon retirement. But most such plans have been replaced by 401(k) plans that require contributions from the worker. Many employers match employee contributions up to a specified limit, but some have even lowered or eliminated this benefit.
Semi-retirement is becoming more common. A growing number of people are working part-time after reaching retirement age. Some are able to negotiate job sharing arrangements or reduced hours with their current employers. Some seek out less demanding jobs where they can work fewer hours. And some start a small business or take up freelancing. This keeps them active and provides continued income while still allowing them to receive full or partial Social Security benefits.
Options for utilizing home equity for retirees are changing. Some plan on selling their homes and moving to a retirement community or purchasing a smaller home, then using the money that’s left over to help fund retirement. But with the decrease in home prices, this option is off the table for many. A possible solution is a reverse mortgage, which allows seniors to borrow based on their home equity without having to make monthly payments. The loan comes due when the borrower moves out or dies. Then the owner or heirs can pay the amount due in full, or the home can be sold by the lender to satisfy the loan.
The face of retirement is much different than it was a few years ago. If you want to have enough money to see you through your golden years, you’ll need to plan carefully and stay alert to trends such as these.
Tags: retirement advice, retirement planning, social security
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on Wednesday, September 21st, 2011 at 7:54 am and is filed under Planning.
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Retirement is a relatively new concept. It was all but unheard of prior to the 20th century, and it didn’t become common in the United States until the advent of Social Security in 1935. Since then, retirement has changed and evolved in a number of ways.
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