The Difficulty of Reaching Retirement

Retirement age

For many working-class older adults in the United States, reaching retirement is an arduous struggle.

The Full Retirement Age (FRA), as Social Security puts it, is age 67 for anyone born in 1960 or later. But the average retirement age in the country varies from state-to-state, and most Americans end up leaving work when hey are around 64 years old.

There are multiple reasons that older adults today may find it difficult to retire. Financial factors like debt, shrinking pensions, raised inflation rates, and high taxes—among others—often force individuals at the retirement age to keep working. And as The New York Times recently reported, the “fastest inflation in decades” has put pressure on people of all ages, including older adults, to return to work. In fact, several “early retirees” who had left their jobs at the onset of the pandemic have since returned to the workforce in the face of the current high cost of living.

Richard Johnson, senior fellow director of the Program on Retirement Policy at the Urban Institute, told NPR that adults ages 65 or older are, today, 75 percent more likely to be working than someone who was in the same age group a generation ago. In fact, 30 percent of workers over 65 say they do not even possess retirement savings. As a recent Axios/Survey Monkey poll put it, “boomers today have more debt than past generations.” Their debt—whether from mortgages, student loans, credit cards, etc.—combines with other aspects and snowballs to prevent them from reaching retirement.

On the other hand, there are also some older adults who don’t actually wishto stop working, and as BMC Public Health published in a recent study, researchers have found that working later in life is actually beneficial for some people. Results of the study proved that sometimes, working part-time at an older age is connected to a better health outlook, making issues like depression or sleep disturbances less likely. Another part of the study found that older individuals who work simply as a way to stay active and for personal enjoyment have a positive quality of life—but not so much for those who are working solely because they have to due to financial reasons.

Of course, as the retirement market has evolved over recent years, especially in the face of Covid-19 and with the rise of the gig economy, online companies have formed to assist workers who want to eventually retire. London-based Penfold and Berlin-based Vantik are just two examples; they work to aid younger people in the workforce who wish to save smartly for their future (saving as early as possible is imperative). There are not currently many companies that work to assist older adults currently facing the woes of being unable to retire, although that is something employers can work toward by taking actions like automatically enrolling employees in their 401(k) plans; this allows for eligible workers in certain plans to have a percentage of their earnings directed into their company’s retirement plan. And, companies like Encore exist to help ease workers into retirement.

Struggling to cover bills, maintaining a high level of debt, forgoing monthly and long-term financial planning, or ignoring inflation are all red flags that mean you are probably not yet ready to embrace retirement. While a large number of Americans do indeed do have retirement plans, many older adults do not actually have enough money saved to fully fund a life without working.

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