Planning to Retire Later also has Risks

The economic situation has made it challenging for some people to retire as planned, causing them to consider working longer. Unfortunately, working longer may not be easy to do.

NPR has been doing a series on Rethinking Retirement. A consistent theme is that people want to work longer before retirement, due to declines in savings, pensions, and retirement accounts. When the economy was doing well, many people were underfunded for their retirements. With the recession and bear market of 2008, many people now can't afford to retire as planned. Working longer is the only option many see.

However, the option to work longer may not be easily controlled by the employee, which makes planning retire later a potentially risky strategy.

The reality is that people are retiring earlier than they had intended. You Won't Retire When You Think You Will by the Motley Fool shares research that shows that a significant percentage of people planning to retire after 65, actually retire before that age. I suspect the downward shift in age may be related to the numerous restructurings and cutbacks being done by many businesses. In addition, fewer people work during retirement than originally planned.

Of course, a quick economic turnaround would help the situation for people near retiring. However, if the economy deteriorates or is slow to recover, planning to work longer may be a risky option to choose.

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This is not financial or retirement advice. Please consult a professional advisor.

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