Everything Finance

If retirement seems further away than it did before the financial crisis and recession, you’re not alone. A recent Vanguard-sponsored survey found that 45% of American investors see putting off retirement as a possible way to cope with the
effects of 2008’s market meltdown. The trend is especially prevalent among people in their 50s, with 54% of them indicating plans to push back retirement dates.

Extending your working years can indeed be an effective way to close a gap in retirement savings, Working longer has a triple benefit: You’ll need fewer years of retirement income, you can save more, and you get extra time for potential investment earnings. Even before the financial crisis, there was a trend toward delayed retirements; the percentage of both men and women working at age 65 and older had edged up steadily since the 1990s.



Don’t slack off on saving
Still, regardless of whether you plan to work until you’re 62 or 72, you need to keep saving for retirement. The reality is that you can’t be certain when you’ll exit the work force. Nearly half of retirees say they retired sooner than planned, according to a 2009 survey by the nonprofit Employee Benefit Research Institute. Many people expect to retire around age 65, but the median retirement age is actually 62, according to the survey.
An earlier-than-expected retirement can be devastating if your nest egg is small, because you won’t have additional time to build up your savings. The cautionary tale here is that some retirements are involuntary. There may be financial problems at your company, or you may have health problems that force you to stop working. Be realistic about your ability to keep working.

Also be realistic about the need to save.
Human nature is such that it’s easier to commit to working longer in the future than to actually boost savings today.
As human beings, we tend to focus on today and put off making behavioral changes to the future. It’s much easier to say that we’ll work longer 10 or 20 years down the road than to save more today. It’s like saying, ‘I’ll start exercising or lose weight—tomorrow.’

Get ready to downshift
If you do want to extend your working years, think about whether to seek a more flexible work situation. In today’s poor job market, such options may be hard to find, but as the economy improves more opportunities should emerge.