Can You Go A Few More Miles? – Working and Retirement
In a recent Boston Globe article by Evan Horowitz, “Go A Few More Miles”, the writer posits that the best way to stretch your retirement savings is to work longer and build up Social Security. If you look at the numbers (Horowitz is an analyst who can write pretty well) the research he sites says “for workers seeking to maximize retirement income, it’s often better to keep clocking in five months past your 66th birthday than to increase personal savings by 15 percent every year for 30 years.” A middle income earner can earn benefits of $320,000 by working to 66.4 years, far more than they are likely to save. He also says, “Quit work at 67, instead of 66, and your monthly Social Security income will rise by more than 6 percent. Retire at 70 and your combined monthly retirement income — Social Security and savings — would increase by nearly a third.”
That is all very powerful, but it begs some questions:
“What if you can’t work longer?” Some people “get retired” by their firms, or are worn out by the demands of the job and need to stop working. Even if given an early retirement package, they may face a gap of several years to get to the 66+ cited in the research. For business owners, working longer may not be possible, since the business (or industry) may have declined so much that it is no longer sustainable. Other times, an owner may have to close the business or sell it for a modest amount, because of a health issue (their own or their spouse’s).
Employers may “Just Say No” – Whatever the reason a person stops working before 66+, they also face the challenge of finding full-time work at an age where many employers won’t hire them (age discrimination is very real, even in a tight employment market).
“What will you give up by working longer?” There is still no such thing as a free lunch. Working takes away from anything else you might want to do. If you look at the figure to the left that we call a Framework for Purposeful Living, “Income-Producing Work” is only one of ten aspects of life. How will you make time for the other areas, if work continues to dominate your waking hours?
The False Dichotomy and a path forward – So perhaps going a few more miles is not full-proof, what may be? The unspoken premise of many is that we must either work full-time OR not work at all. Who says? Is it a law of nature? I call that the False Dichotomy (created by the “Golden Years” lifestyle mythology). Maybe the choice is to work part-time in your 60s+, earning social security benefits while also exploring your other wishes and dreams. This part-time work may not define “who you are” as your full time career may have, but it can be part of a meaningful life and allow you to stretch your savings plus eventual Social Security benefits. A win-win-win.
To think about your future in a more robust manner, check out Exploring Your Life, Shaping Your Future . You are can also download Chapter One of the acclaimed book, “7 Principles for Living With Authenticity” by Jack Beauregard, or click the image at left.