More working after 65 because of finances

Senior waitress using coffeemaker in cafe

Image: Wavebreak Media Ltd/Bigstock.com

Almost 20 per cent of over-65s are still working full time or part time in the United States—that’s the highest level for more than 50 years, since 1962. And it’s financially driven, says Jean Setzfand, senior vice-president of AARP, the organisation that did the study.

In the year 2000, 13 per cent of Americans aged 65+ were still working full time or part time. The percentage is now 19 per cent and expected to reach 32 per cent by 2021.

This is not all bad news, says Setzfand because ‘19 per cent of the folks that we talked to actually wanted to stay in the workplace because they enjoy it.’

She describes work as a social outlet where the 65 plus’s feel productive. ‘So there’s a good reason for people to actually want to stay in the workplace longer.’ And, another thing: ‘Because we’re actually living longer, what greater way to stay engaged but at the workplace.’

Meanwhile in Australia

More Australians aged 45 and over are intending to work longer than ever before according to the Australian Bureau of Statistics (ABS) survey.

There has been a dramatic rise over the past few years. The ABS found that 48 per cent intended to retire at the age of 65 or over in 2004-2005. That rose to 66 per cent in 2012-2013 and to 71 per cent in 2014-2015.

And more are planning to retire at 70 or older. ‘The [2014-2015] survey found that 23 per cent of the persons aged 45 years and over are intending to retire at 70 years or later compared with only 8 per cent in 2004-05,’ said Jennifer Humphrys from the ABS.

The overview report reveals ‘financial security’ as the most common reason influencing the decision about when they would retire (40 per cent of men and 35 per cent of women). That’s followed by ‘personal health or physical abilities’ (23 per cent both genders), and ‘reaching the eligibility age for an age (or service) pension’ (13 per cent both genders).

Common threads

In looking at the numbers delaying retirement in the US and the intention of Australians to retire later, finances is the most common reason. There’s a sense of financial security with staying in the workforce—whether it be full time or part time.

This is complicated by the expectation that those who reach 60 could be looking at 20 years or so (perhaps 30) in retirement. The risk is that you may run out of money before you run out of life.

If you haven’t already done it, now is a good time to do some financial planning. You need to know your financial situation and how to best prepare for your retirement.

In a recent post, I mentioned that a third of Australians were depending on family members for their financial advice. Unless your family members are trained and accredited to understand the system, you can do better than that. You need to do better than that.

You could begin by scanning through the Finance posts on this site (go to Topics to find it). Better still, talk to a financial advisor who can talk about your specific needs.

Bruce Manners: the author of Retirement Ready?, Refusing to Retire, and founder of RetireNotes.com

Category: Finances, Working

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