By Antonio Porretta
Over the years as you’ve been planning and saving for (and dreaming about) retirement, you probably had an ideal retirement age in mind. But what happens if you calculate your retirement income needs and the numbers come up short? Should you just plan on retiring later so you can maximize your working years and minimize how long you’ll need to live off your savings? Although this may sound like the most logical option, it isn’t always the most effective strategy.
According to the 2021 EBRI Retirement Confidence Survey, there is a considerable gap between when a person expects to retire and when they actually retire. While 26% of respondents stated that they would like to retire at age 70 or older, only 6% followed through. Most end up retiring earlier and often it’s not by choice. There’s always the chance you could lose your job or fall ill. Even if you want to work longer and save more, there’s no guarantee you’ll actually be able to.
Let’s discuss a few specific reasons why planning to retire later is not a reliable strategy.
Unexpected Health Problems
Even if you are the picture of health today, you never know what will happen in 5, 10, or 20 years. As you age, your health can suffer. Working longer is not a guarantee, as 34% of retirees in 2021 were forced to retire early due to a health problem or disability.
Your Company Downsizes
It is incredibly disheartening if you are in the last few years of your career and your company downsizes, leaving you in the dust when you were counting on the income to provide for you in retirement. In fact, 25% of retirees were forced into early retirement due to changes at their company. At this stage of life, it’s challenging to find another job when prospective employers know you will be retiring soon. While you can keep your skills sharp and take measures to prove your value to your current employer, you just never know what will happen to your company as the years go on.Â
Your Family Needs Your Help
Your loved ones are aging right along with you. Even if your health is excellent and your company still needs you, you may need to step back from the workforce earlier than planned to take care of a spouse or other family member. Your family comes first, so you don’t want to feel the pressure of working just to have enough in retirement if the unexpected occurs. It’s not fun to plan for contingencies like this one, but having a proactive mindset can help you prepare for the worst case scenarios leading up to retirement.
You Might Just Need a Change
When you’re in your 50s and still have years to go before you retire, it may seem simple enough to push out your retirement date from 65 to 70. But what happens when, at 63 or 64, you can’t imagine working for another six or seven years? If you were banking on working until 70, you might not have enough saved.
The younger you are when you retire, the more energy and health you’ll have to enjoy retirement. Many retirees regret spending their best retirement years grinding away at work. Sure, they had more money when they finally did retire, but they had less time to enjoy it.
Since you can’t predict the future, how should you plan?
Start With a Plan
No one knows what the future holds, so of course it’s possible that you may be able to retire when you want to (or even continue working after the retirement milestone). But if you do need to retire earlier than planned, wouldn’t you rather know now that you’re doing everything you can to be successful and comfortable? You’re never too young or old to start taking action and planning for your future, be it 5 or 20 years down the road.
At Blackbridge Financial, our mission is to help you develop a holistic plan designed to connect you with your future. Working with us, we can help you map out various retirement scenarios to see what your savings can handle and then review opportunities for maximizing your retirement accounts so you can get the most out of your assets.To learn more, email me at antonio.porretta@lpl.com or call 704.960.9646.
About Antonio
Antonio Porretta is an independent wealth manager at Blackbridge Financial with over 20 years of experience. He specializes in helping people create, distribute, and preserve their wealth. Antonio received an executive MBA from Saunders College of Business at Rochester Institute of Technology in 2007 and also holds the Accredited Asset Management Specialist℠, AAMS® designation. Originally from Rochester, NY, Antonio has been a resident of Harrisburg, NC, since 2007. Outside of work, he enjoys playing soccer and tennis, coaching, and spending time with his wife, Laura, and their children, Cristiano, Victoria, and Matteo. To learn more about Antonio and how he can make a difference in your financial life, visit www.blackbridgefinancial.com.
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