Many Americans now hope to be able to work past 65 to help cope with rising costs. For many, the dream of retiring at 62, or even 65, appears to be beyond reasonable expectations. Some older Americans are thinking they may never be able to retire.
Although they expect to stay employed longer, many have already discovered that it also may not be a realistic hope. Many large companies (including Google, Amazon, Microsoft, and many more) have laid off hundreds of employees, and smaller companies are sometimes bought, merged, or closed. The result for many older Americans is that they were laid off or forced to retire years before they planned to. Afterward, many seniors found that companies would not hire them because of their age, leaving no other choice but to retire.
Most Seniors Will Soon Be Working Past 75
The Bureau of Labor Statistics predicts that as many as 96.5 percent of people 75 and older will need to be working by 2030. This projection indicates that nearly all of them still need to be working at and beyond that age primarily because they do not have enough money saved to meet their needs in retirement.Health problems also prevent many seniors from working longer than 65. Injuries, accidents, or events such as a heart attack, stroke, or cancer will force many to retire earlier than expected. Many also leave a job to care for a loved one.
Working Longer May Help You Live Longer
Besides being able to put more money into a retirement account, you may want to work longer because it may help you live longer. A study reported in the Harvard Business Review revealed that working longer may reduce your mortality rate by 11 percent.Sign-Up for Medicare
Medicare has penalties that you may have to pay for the rest of your life if you do not apply on time. You have a seven-month window to apply for it—three months before your birthday, your birthday month, and three months after. USNews says the penalty is 10 percent for every year you fail to get enrolled.Claim Social Security
It is not a good idea for most people to take Social Security as soon as they turn 62—if you can avoid it. Since you cannot ensure that you can keep working into your late 60s and early 70s (when you need to start taking required minimum distributions [RMDs]), you may need the money to make ends meet.
Every year you wait to claim Social Security benefits, you get 8 percent more. The difference in benefits between 62 and 70—when you can get the maximum benefit—is about $1,000 more monthly.
During the year you reach full retirement age, the government will deduct $1 for every $3 earned before you reach that age. During the months before you reach your full retirement age, you have an earnings limit of $59,520. After your full retirement age, there is no limit to how much you can earn.
Prepare Now for Retirement
Preparing for retirement as early as possible will help you be ready to retire comfortably when you reach retirement age. People live longer now, and your medical bills will likely increase after reaching 65.Consider Taxes
Taxes can eat up a large percentage of your retirement savings. Any money you get from retirement accounts, pensions, investments, etc., can be taxed as high as 37 percent, depending on your income range and the type of account. You also should prepare to reduce your taxes during your retirement years to have more to live on.Even if you are laid off or must quit to care for a loved one, you still have an opportunity today to get work-from-home jobs or work as a freelancer. The best retirement strategy is to put more into a retirement account with your employer or get a solo 401(k) if you are self-employed. Talking to a financial advisor can help you prepare the best retirement plan.
