{"id":8996,"date":"2021-11-14T13:31:17","date_gmt":"2021-11-14T17:31:17","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=8996"},"modified":"2021-11-14T13:37:22","modified_gmt":"2021-11-14T17:37:22","slug":"why-you-need-to-plan-for-longer-careers","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=8996","title":{"rendered":"Why You Need To Plan For a Longer Career"},"content":{"rendered":"
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Try this on for size. Americans say they\u2019re less likely to work into their 60s. That\u2019s according to new data<\/a> from the New York Federal Reserve.<\/span><\/p>\n<\/div>\n<\/div>\n

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Seriously, folks.<\/p>\n

Has the pandemic really changed how people think about work?<\/p>\n

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\u201cThe average expected likelihood of working beyond age 62 ticked down to 50.1%, from 51.9% in July 2020, the lowest reading since the start of the series in March 2014,\u201d according to the press release. \u201cThe average expected likelihood of working beyond age 67 also declined to 32.4% from 34.1% in July 2020.\u201d<\/p>\n

Read on MarketWatch<\/b><\/a><\/p>\n

While that isn\u2019t a huge shift. It does reflect something about the future workplace, at least in theory.<\/p>\n

And I get it. The time we have spent working remotely and the jarring disruption of our workplaces has made many people ponder their priorities and what really matters to them.<\/p>\n

Workers who lost jobs, or took voluntary early retirement packages, may opt to step away from the hassle of trying to battle the ageism and rejection that come from job hunting at this stage in their career. If they were lucky enough to have tax-deferred retirement accounts, the run up in the markets certainly has been a sweetener for the pot and makes that decision much easier.<\/p>\n

But that\u2019s not what these statistics are showing. These are younger workers, presumably, who are forecasting. The key words in the Federal Reserve report findings are \u201cexpected likelihood.\u201d<\/p>\n

I know from my reporting and discussions with workers of all ages that most want to work for employers who value them, and work-life balance is imperative for those who wrestled with burnout on all front in the past year and a half. There is a yearning for taking more control of one\u2019s working life with flexibility and autonomy.<\/p>\n

But retiring and stepping away from paid income in your early 60s seems to me not only foolish on a financial front, but perilous on a personal front in terms of mental engagement and even the emotional gain from being needed and having a network of co-workers that create a social human circle. And there are so many options for work these days. It can be contract or remote, both accelerated by the pandemic.<\/p>\n

I had the opportunity to chat about this new report on Wisconsin Public Radio<\/a> last week with host Rob Ferrett. And boy did we get a lot of call-ins.<\/p>\n

The real news is people who we spoke to know in their gut that they will need to keep working. I\u2019m not saying they are wild about that notion, but they aren\u2019t fantasizing.<\/p>\n

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Elder poverty is a looming crisis<\/strong><\/div>\n<\/div>\n<\/div>\n<\/div>\n

So I am uncertain who responded to this survey in such a pie in the sky manner. They clearly aren\u2019t at the stage where the reality has sunk in about what it takes to finance three more decades of living when you\u2019re not working<\/em>.<\/p>\n

For more than a decade, I have been concerned, speaking and writing about the looming elder poverty crisis in this country. That crisis is emerging as baby boomers retire and are faced with longevity without the savings to finance the years ahead and medical costs, in particular, at the end of life.<\/p>\n

Many people believe that Medicare will cover all their healthcare cost in retirement. Think again. That\u2019s a myth.<\/p>\n

Experts at Fidelity have estimated that about 15% of the average retiree\u2019s annual expenses will be used for health care-related expenses, including Medicare premiums and out-of-pocket expenses.<\/p>\n

According to the Fidelity Retiree Health Care Cost Estimate<\/a>, an average retired couple age 65 in 2021 may need approximately $300,000 saved (after tax) to cover healthcare expenses in retirement.<\/p>\n

Obviously, that figure comes with caveats because ultimately what you will shell out will depend on when you retire and where you live, your overall health, and that great crystal ball of how long you will actually walk this earth.<\/p>\n

And there are more nuances as well when you drill down. The amount you need will depend on which accounts you use to pay for healthcare\u2014a 401(k), a Health Savings Account (HSA), which permits tax-free spending on healthcare in retirement, an IRA, or taxable accounts; your tax rates in retirement and other factors.<\/p>\n

That gets me to the real problem I have with these kinds of data dumps that stir up headlines like Bloomberg Wealth\u2019s \u201cAmericans Say They\u2019re Now Less Likely to Work Far Into Their 60s<\/a>.\u201d It\u2019s bold and provocative, but consider that a huge swath of Americans lack access to employer-provided retirement plans like 401(k)s, HSAs or have much of anything socked away for retirement.<\/p>\n

\u201cIn America, millions of older adults exist on the economic edge,\u201d writes Lisa Glow, CEO of Central Arizona Shelter Services (CASS), the largest and longest serving homeless emergency shelter provider in Arizona, in a MarketWatch opinion column that originally appeared on NextAvenue.org<\/a>.<\/p>\n

The headline: Millions of older Americans live on the economic edge\u2014evictions will send them into homelessness.<\/a><\/p>\n

\u201cMany become homeless when their rents are raised; others when they have a medical crisis or lose a spouse,\u201d Glow writes. \u201cThe cards are especially stacked against the poorest \u2014 many live on no more than $1,000 a month in Social Security income. That\u2019s hardly enough to cover the costs of rent, utilities, medications and food.\u201d<\/p>\n

So who are these people who are cavalierly saying they don\u2019t expect to be working beyond age 62? What planet are they that they living on to have such a dreamy expectation? Let\u2019s get real. And frankly, why is not working such an aspiration anyway?<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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\"\"<\/a>About the Author<\/span><\/h3>\n<\/header>\n
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Kerry Hannon is a leading expert and strategist on work and jobs, entrepreneurship, personal finance and retirement. Kerry is the author of more than a dozen books, including “Never Too Old to Get Rich,” “Great Jobs for Everyone 50+,” and “Great Pajama Jobs: Y<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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