5 Reasons to Not Bother Retiring
- Friday, March 21, 2014
Roy Cohen is closing in on retirement age, but that doesn't mean he has plans to slow down.
"I do intend to work," says the career counselor and executive coach when asked about his retirement plans. "Just on my terms."
Larry Stybel, an executive in residence at the Sawyer Business School at Suffolk University in Boston, describes this as the "mosaic" stage of life.
"Mosaic is defined as finding income from a number of sources rather than one source," says Stybel, who is already past the usual age for retirement.
Cohen and Stybel are just two members of the baby boomer generation who are thinking twice about riding off into the sunset of retirement. Rather than leaving the workforce on the usual schedule, more older Americans are choosing to work longer, either voluntarily or out of necessity, according to several polls.
A December 2013 Gallup poll found that nearly half of boomers don't plan to retire until they are 66 or older, and 10 percent say they expect to never retire. Those findings echo a survey published a few months earlier by the Associated Press and the NORC Center for Public Affairs Research. That poll found that 82 percent of workers age 50 and older expect to work for pay in retirement.
While plans like these conflict with the conventional notions of retirement, a look at today's retirement landscape suggests that these workers could be on to something.
Here are five reasons it may make sense to forgo a traditional retirement today.
1. Retirement means lots of free time … maybe too much
"I need to keep busy or I will excessively ruminate and lapse into becoming morose," says Stybel. "Being busy is important therapy and getting paid while being busy is fun."
To stave off the boredom, workers like Stybel are shifting gears or slowing down without exiting the workforce completely. The website RetiredBrains.com - founded, incidentally, by a senior not ready to retire - surveyed 3,000 business professionals and found that more than half of them say moving to a part-time schedule is their plan for retirement.
2. Working later may help you stay healthier
While work is often considered stressful, retirement is not necessarily a picnic either. Several studies have linked stepping out of the rat race with an increase in health problems.
According to the Holmes-Rahe Stress Inventory, retirement is the 10th most stressful life event. That may explain why a study from the University of Michigan found that retired individuals were 40 percent more likely to have a heart attack or stroke than those who were working. A 2010 study published in the Journal of Economic Perspectives found early retirement is linked to a "significant negative impact" on cognitive abilities.
"If work has been found to enhance good health, then extended retirement is just not a smart or practical idea," says Cohen.
3. Your savings probably aren't up to the task
"Baby Boomers have not saved enough," says Keith Klein. "That's the bottom line."
Klein, a financial adviser and owner of Turning Pointe Wealth Management in Phoenix, Ariz., says he sees a trend in boomers delaying retirement, particularly those who don't have a traditional pension to rely upon.
A 2011 bulletin from Social Security Administration notes that at age 62, the earliest age when someone can receive Social Security retirement benefits, individuals have an average of 21.4 years (men) or 23.8 years (women) of living left. That's a lot of time to rely on a nest egg.
Cohen agrees that many of his counterparts are not financially ready to take on an extended retirement. "Many boomers simply can't afford to retire," he says. "They lived well and large, invested opportunistically in real estate and had children later in life."
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