A lack of savings among many U.S. households could mean a change in the perception of retirement. It used to be a foregone conclusion that once you were too old to work, you retired. That’s not always the case anymore.
More than a third of U.S. households in prime earning years or later have no retirement savings and no access to a traditional pension. It’s become increasingly uncommon for people to retire in their early 60s, and those who fail to plan ahead for their future retirement income needs could end up with a retirement lifestyle worse than the one they had while working.
This doesn’t mean these middle-aged households are broke. Retirement income planning may just not be a priority yet. No matter your age, it’s never too late to start building strategies so you can enjoy your post-working years, and as financial professionals, that’s what we’re here for.
It takes diligence and focus to create a retirement income plan. Dwight D. Eisenhower once said, “Plans are worthless, but planning is everything.” This reiterates the point that planning for retirement should be strategic and committed, while at the same time fluid and flexible. Nobody knows what will happen in the future, but we can help you create a retirement income strategy designed to help meet your specific goals.
It can be difficult in the moment, but turning your back on pricey, impulse purchases, such as an expensive car, an outdoor kitchen or backyard pool, can help improve the prospects of your retirement down the road. Many people with good credit can borrow money to purchase these things, but good credit doesn’t fund a long retirement.
Some workers might argue it’s not worth giving up indulgences today for a better (and earlier) retirement lifestyle. It’s a matter of examining individual priorities. One grandmother did just that when her 8-year-old grandson asked if she would be around when he got married. She had to rethink her priorities for what it might take to accomplish that goal. This led to a stronger pursuit of healthier living, including wholesome food, daily exercise and supportive social connections.
While it may sound daunting to put in the years of hard work it takes to reach retirement, in some ways long hours at the office is a status symbol of its own. In Italy, the leisure class is perceived to have a higher status than the working class. But in the United States, there’s a certain prestige associated with working long hours and constantly being busy.
Some people work 70+ hour weeks, not to earn more money and buy more things, but because that is what the working elite do.6 While this may not be the way all people wish to align their priorities, it does offer the distinct advantage of being able to save more money for retirement. For some, retiring is the ultimate status symbol.
Content prepared by Kara Stefan Communications
1 Stan Choe. The Denver Post. Nov. 18, 2016. “Easy retirement for Americans? It’s only for a privileged few.” http://www.denverpost.com/2016/11/17/easy-retirement-privileged-few/. Accessed July 10, 2017.
2 Jonathan Look. NextAvenue. June 23, 2017. “What I Did to Stop ‘Awfulizing’ Retirement.” https://www.forbes.com/sites/nextavenue/2017/06/23/how-i-stopped-awfulizing-retirement/#1d5429451baf. Accessed July 10, 2017.
3 Holly Johnson. Club Thrifty. May 15, 2017. “My Plan to Achieve the Ultimate Status Symbol.” http://clubthrifty.com/my-plan-to-achieve-the-ultimate-status-symbol/. Accessed July 10, 2017.
4 Jane E. Brody. The New York Times. April 20, 2016. “Thriving at Age 70 and Beyond.” https://well.blogs.nytimes.com/2016/04/25/thriving-at-age-70-and-beyond/. Accessed July 10, 2017.
5 Lisa Tolin. NBC News. April 3, 2017. “The Busy Trap: How Keeping Busy Became a Status Symbol.” https://www.nbcnews.com/better/careers/busy-trap-how-keeping-busy-became-status-symbol-n742051. Accessed July 10, 2017.
6 Ben Tarnoff. The Guardian. April 24, 2017. “The new status symbol: it’s not what you spend — it’s how hard you work.” https://www.theguardian.com/technology/2017/apr/24/new-status-symbol-hard-work-spending-ceos. Accessed July 10, 2017.
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