The following has occurred to me countless times; maybe it has you as well. Perhaps you’ve even been the one to utter those oft-repeated words.
Two or more people are talking about how far behind they are in saving for retirement. They’ve saved so little, in fact, that the idea of raking together a half million dollars or so in savings by age 65 seems an impossible dream. There’s the pause, and then one of the conversationalists mouths the punchline.
“My retirement plan,” he or she says, “Is to work until I drop dead.”
Not exactly “A” material as comedy goes, but it often draws a nervous titter. And I think that’s one of the twin objectives of the person speaking the line.
The comment is meant first to get a chuckle and a commiserating nod from one’s partner in patter, making the speaker feel not so alone. Second, it’s intended to offer added reassurance to the quipster. “Okay, maybe I didn’t do that great a job saving for retirement,” he or she thinks. “But it’s not like I’ll be dumpster diving. I can always just go on collecting a paycheck after 65.”
Maybe that’s true. But if a recent study is any indication, it’s more likely false. And that realization should give anyone complacently planning on continuing to draw pay post-65 new urgency to come up with a real retirement plan, one taking into account the notion that health issues, ageism, the need to care for an ill spouse, disability or many other factors might make it impossible to go on working.
A big disconnect
The Employee Benefit Research Institute (EBRI) has conducted its annual Retirement Confidence Survey for the past 23 years. One question asked of current workers is whether they intend to work for pay after traditional retirement age. The survey also asks retirees if they are currently working for pay.
Since 1998, the percentage of workers saying they intended to work longer has ranged from 56 to 74 percent, with the current figure being 69 percent.
“Meanwhile, we asked retirees whether they were working for pay, and that has crept along in the 20s for most of the time we’ve done the survey,” Nevin Adams, director of education and external relations and co-director of the EBRI Center for Research and Retirement Income, told me recently.
This year, one quarter of retiree respondents were working for pay, a decline from 37 percent in 2007, and 34 percent in 2009, Adams said.
That means the percentage of post-65ers who actually are working is just more than one third the percentage of workers who say they want to go on working. Is it too much a stretch to say if you plan on continuing to be paid for working after age 65, your chances of doing so might be approximately one in three?
That’s scary or should be for those hanging retirement hopes on the ephemeral notion they’ll be in demand by employers through most of their Golden Years.
Interestingly, the idea of walking away from one’s working days because of sufficient retirement cash was just one of the reasons retirees said they quit before they intended to, Adams said. The most common reason, offered by 55 percent of respondents, was that they had a physical health problem or disability.
After the second most common reason — that the respondent could afford to retire — other frequent reasons for quitting included leaving the workforce to care for a spouse or family member (23 percent), because of changes with the employer (20 percent), another work-related issue (20 percent) and a desire to do something else (19 percent). Clearly, some respondents offered more than one reason for leaving the workforce before they had planned to.
Sometimes, it’s good to get a slap in the face, a bucket of ice water over one’s head, or some other painful wake-up call. This is one such time, Adams says. “It’s not always within your control at what point you retire,” he cautions. “Realize it might happen sooner than you want, and make preparations.”
You can take Adams’ urging one of two ways. First, the preparations you ought to be making are the same ones we’ve always been advised to make. Save, save and save some more, so you’ll have options retirement savings provide.
But a second approach to his admonition might be to stop joking and get serious about working longer. That way, you may be able to develop or acquire the qualities that will make it hard for you to be retired against your wishes.
That could mean studying the occupations forecasters predict will be in demand for the next decade, and getting trained for one of those.
It could mean researching the professions and the employers most friendly to older workers, and begin mining these opportunities long before age 65. It could mean taking your current skills and building a consultancy around them. Or it might mean starting a business in a field unrelated to the one you’ve held.
Of course, we can always hope that by the time we workers retire, it will be a lot easier to continue working than it is today. But why risk it? Respond to that wake-up call, and do it before your fallback gets whacked.