Author Topic: Why Working Till Whenever is a Risky Retirement Strategy  (Read 7716 times)

Parizade

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Why Working Till Whenever is a Risky Retirement Strategy
« on: May 28, 2019, 12:35:20 PM »
Why Working Till Whenever is a Risky Retirement Strategy

I think this is the first time I've seen a mainstream article that addresses the risk of waiting until a "normal" age to retire. I have seen a number of women and men get pushed out of their jobs as they got older. It's often more challenging to keep up with new technology as you age, at the same time health and energy levels begin to ebb. Older workers are often making top dollar because of their experience, and administrators begin to wonder if a young eager person might be more productive for a lower salary.

Continue working as long as you like, but be smart and get to FI as early as you can.

Cassie

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #1 on: May 28, 2019, 01:32:16 PM »
You just don’t know when you will get sick, disabled or downsized.

Freedomin5

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #2 on: May 28, 2019, 04:18:17 PM »
I agree. Wisdom suggests that, when you have a firehose of cash, you divert a portion of that cash in preparation for the day when the firehose becomes a trickle.

John Galt incarnate!

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #3 on: May 28, 2019, 05:11:12 PM »
You just don’t know when you will get sick, disabled or downsized.

Or drop dead.

pachnik

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #4 on: May 28, 2019, 05:16:58 PM »
You just don’t know when you will get sick, disabled or downsized.

This exactly. 

frugalecon

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #5 on: May 28, 2019, 06:01:29 PM »
Yep, this article is spot on. Minimal preparation in one’s twenties and thirties pays big dividends. In another thread I chronicled the saga of someone who always responded “I’ll just work until I’m 80” when I urged him to save. He lost his job 6 years ago at 61, and he hasn’t managed to land full time, regular work since them. Now he is effectively destitute, and he survives on meager Social Security (a legacy of his poor work record), public assistance, and occasional infusions from friends. He will probably struggle from now on.

js82

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #6 on: May 28, 2019, 06:35:42 PM »
You just don’t know when you will get sick, disabled or downsized.

Or forced into premature retirement by AI/automation.  This will be the case for a substantial fraction of Millennials/Gen Z.
« Last Edit: May 28, 2019, 06:38:50 PM by js82 »

Mormon Money Mustache

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #7 on: June 02, 2019, 08:51:50 PM »
It's funny. My wife and I were just discussing this today. One thing that makes us different from our peers is that I have never once though to myself "yeah, I'll work until I'm 65." Whereas I have heard this sentiment from almost everyone I've ever talked to about the subject. IMO that translates to "I have never paid any dues to figure out the math so I won't strive to do anything exceptional and just hope to hang on until I'm old."

Maybe I'm off-base on this thinking, but what else are people supposed to think? There's no formal education about money so people just do what their parents may or may not tell them to do. So if you parents sucked with money (mine did but go lucky in the end) then your initial trajectory already sucks.

This topic actually makes me sad. If I get to FIRE I'd like to have some company...

Parizade

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #8 on: June 03, 2019, 03:48:13 AM »
This topic actually makes me sad. If I get to FIRE I'd like to have some company...

What makes me sad is how many people my age (62) don't even have a plan in place to retire at 65. They are still in the mindset that they will just keep working. Then they get pushed out of their job and can't get a new one, but they have no savings in place and an unsustainable lifestyle. I see it happening to people around me and it breaks my heart.

freya

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #9 on: June 03, 2019, 06:02:20 AM »
We're now well into the post-pension era, and it's not working out so well.  This is a major retirement crisis that's brewing:

Quote
Many Americans understand that working longer can be a good way to improve retirement security. According to the Employee Benefit Research Institute, 33 percent of workers expect to retire between the ages of 65 and 69, and 34 percent at 70 or beyond, or not at all.

Yet a recent study by the Center for Retirement Research at Boston College found that 37 percent of workers retired earlier than planned — and that the odds of success fell as the goal became more ambitious. In that study, among the 21 percent of workers who said they intended to work to age 66 or later, 55 percent failed to reach that target.

Combine that with the generally low levels of long term savings, and...well, let's just say that I'm very thankful I saw the light early enough and set my sights on becoming FI.  (To say nothing of increasing workplace toxicity.) On the other hand, I'm wondering if people with large pots of savings are going to become a tempting political target.

Cassie

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #10 on: June 03, 2019, 10:08:52 AM »
Many of my friends worked for the government like me so retired between 54-60.   One couple works from home at 73 with no plans to retire.  I know a few on SS only that had to move to senior housing and pay 30% of income for rent.

Linea_Norway

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #11 on: June 25, 2019, 04:48:39 AM »
I have always thought it was a depressing thought to be working until the age of 65/67. By the time you are free, you are getting old, fast.

In the beginning we didn't deliberately save for retirement, but we just lived frugally, paid down our mortgage and saved a bunch in the stock market. Turned out to be a pretty good retirement strategy.

GreenToTheCore

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #12 on: June 25, 2019, 10:42:17 AM »
They stuck this gem at the very end of her story segment, then no further discussion about it.
If she stopped paying the dog show and "other competitive event" fees then I wonder if she would be able to live on her savings.

Quote
“This is a topic that makes me really uncomfortable, so I am not studying when we start circling the drain on a very frequent basis,” she said.

At this point, Ms. Parker is seeking full-time work and hoping to postpone filing for Social Security until her full retirement age of 66. She expects the couple’s combined Social Security benefit to provide $4,000 in monthly income.

She wants to work as long as possible, partly to support her lifelong passion for dogs — she has four bull terriers and participates in dog shows and other competitive events.

GreenToTheCore

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #13 on: June 25, 2019, 10:46:05 AM »
I wish these articles would touch on lifestyle cost.
It would probably explain the Ms. White story, too.


Thanks for sharing.
Sometimes I gotta remind myself that an article can't address all the good money practices, that even addressing just one aspect is a huge win.

Spud

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #14 on: June 29, 2019, 01:13:40 AM »
Quote
Elizabeth White, an international development expert specializing in sub-Saharan Africa, was MAKING $200,000 A YEAR as a consultant when the economic crisis hit in 2008. Her consulting income disappeared, and she turned to a mix of consulting gigs, writing and speaking engagements.

Now 65, Ms. White has burned through her retirement savings, but owns her home in Washington with a low-rate mortgage that she is close to paying off. She is holding off on filing for Social Security until she reaches the full retirement age of 66 this year.

I'm in a particularly brutal mood this morning. I apologise, but at the same time, I don't apologise. Mrs White is a fucking idiot.

If you're earning $200k a year, you should be in a position to retire and never ever work again within a maximum of 10 years.

Whilst she may not have always made $200k, I doubt she got a raise from $35k. I'm betting she spent a significant amount of time earning £80k, £100k, £120k, £150k etc, so she's had plenty of opportunity to amass savings that could set her up for life.

MMM never earned as much as her, and yet he was done basically done 9 years. Imagine what this woman could have done.

I remember reading something in the journal section of this site a year or two ago - people unsure what to do, hubby was on $300k and they had 3 kids and blah blah blah. Shut the fuck up.

People earning this much who are this stupid make me want to go medieval on them.

Buffaloski Boris

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #15 on: June 29, 2019, 05:57:35 AM »
This is simply a great thread and I love the comments so far. It also highlights why I’m so enthusiastic about FI and similarly kind of meh about RE.

FI to me is almost like self insurance writ large. It’s recognition that you’re not invincible. Yeah, going off and traveling the world is kinda cool. But the important thing is to be in a position where you can deal positively with the crappy things that life will almost certainly throw your way. Things such as job loss, sickness, sick family members, disability, toxic workplaces, layoffs. There is no such thing as an umbrella “anything bad that happens to me” insurance policy out there you can buy. The closest thing to it is having a very healthy amount of money invested that can smooth the way.

SwordGuy

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #16 on: July 12, 2019, 04:48:06 PM »
People earning this much who are this stupid make me want to go medieval on them.

Perhaps I could recommend a sword and short axe?   Though a spear or a glaive have their own special charms...

(That's me on the right.)


kanga1622

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #17 on: July 25, 2019, 01:41:39 PM »
My FIL had the company he worked for shut down when he was in his mid-50s. The state he lived in paid for "re-tooling" and he went back to school. Of course, during the time he was in school was when that new industry was imploding. Once he graduated, he could not find a job in that field as not only were jobs in short supply but he was almost 60. He has not worked more than helping out family since then. I truly hope he was saving before this all happened as I fear he will come looking for support at some point in the not too distant future. He shares expenses by living with a sibling of his for now but I worry about what happens if that sibling passes or moves into a retirement facility and he is left trying to cover all the costs (or kicked out by the sibling's kids).

jengod

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #18 on: July 26, 2019, 01:25:27 PM »
Why Working Till Whenever is a Risky Retirement Strategy

Continue working as long as you like, but be smart and get to FI as early as you can.

I have an alarming number of female friends who hit 45 or 50 or 55, and basically cease to ascend professionally or get laid off and/or have a child or elderly parent caregiving situation that keeps them from changing careers or relocate for work.

They are in major economic peril for one reason or another and their income trajectory does not look positive.

The period between college and childbearing should be optimized as to both income and outgo but if you were raised to believe that you will work continuously for some kind of reliable paternalistic entity between age 21 and 65 you don’t think that way. And as it turns out late-stage capitalism doesn’t do a lot of caretaking for its workers...live and learn.

SwordGuy

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #19 on: July 26, 2019, 01:30:55 PM »
And as it turns out late-stage capitalism doesn’t do a lot of caretaking for its workers...live and learn.

No stage of capitalism has ever done a lot of caretaking for its workers unless forced to do so. 

pachnik

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #20 on: July 26, 2019, 04:36:22 PM »
I have an alarming number of female friends who hit 45 or 50 or 55, and basically cease to ascend professionally or get laid off and/or have a child or elderly parent caregiving situation that keeps them from changing careers or relocate for work.

They are in major economic peril for one reason or another and their income trajectory does not look positive.

The period between college and childbearing should be optimized as to both income and outgo but if you were raised to believe that you will work continuously for some kind of reliable paternalistic entity between age 21 and 65 you don’t think that way. And as it turns out late-stage capitalism doesn’t do a lot of caretaking for its workers...live and learn.

I am 55 and concerned about my employment future.  The law firm I work as an assistant in will be closing its doors soon - next 6 months maybe?  The partners are all retiring.  At that point, I will be looking for a new job - hopefully the same kind of work.   

I don't have enough of a stache to retire when they do.  However, I will at least in a position to need to work to pay my expenses and not worry about adding to my stache. 

freya

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #21 on: July 26, 2019, 04:45:29 PM »
I can definitely speak to the phenomenon of women after 50 who end up as caretakers for elderly relatives:  that's exactly what's happening to me (academic medicine) and my sister (ER doctor).  I've turned down a lot of pleas to interview for high level positions elsewhere - partly that's because I don't really want such a position, but partly also because of the caretaker needs.

I'm good with the situation though.  I'm quite happy where I am, and I figure that what goes around comes around:  by caring for our older parents/aunts/uncles, my sister and I are setting an example - and one day WE will be the ones who need the care.   Besides, another phenomenon sets in around this age:  we are both getting heartily sick of work and all the associated forms to fill out, online courses to take, certifications to renew, and on and on.   Caretaking is actually a refreshing change. There's no doubt, though, that this task generally falls to women.

Cassie

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #22 on: July 26, 2019, 05:00:30 PM »
I did some caretaking of parents and I definitely wouldn’t let my kids do this.

MKinVA

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #23 on: July 26, 2019, 05:08:34 PM »
I, too, can attest to the importance of being ready for retirement as early as possible. I was able to retire at 50, but continued working because I had 2 kids in college and I succumbed to the one more year which lasted 5 years. I told my boss I was retiring, got my papers together, and my boss came to me with a great promotion, a job I would have wanted to do. I said let me think about it. The next day my doctor called back for tests after my annual exam. Ends up I had breast cancer. And not the good kind (ha, ha). So I was facing surgery, chemo, and radiation over the following 8 months. I told the boss about my illness, thanked him for the offer, but declined the promotion. I went ahead and retired. During much of it, I could not have worked.  I was physically unable to.

I thank myself every day for having the forethought to be prepared early to retire. I was able to concentrate on my health and not have the agony of having to work while sick. I have seen that happen to people. For the record, I was always healthy, no history or family history of breast cancer. It just hit like lightening. You absolutely never know what can happen in life. Be prepared.

scottish

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #24 on: July 27, 2019, 05:33:04 PM »
I'm glad you were able to beat the cancer!   A little bit off-topic, but are you in the US?    If so, were you able to get good cancer care without insurance through work?

MKinVA

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Re: Why Working Till Whenever is a Risky Retirement Strategy
« Reply #25 on: July 27, 2019, 07:12:03 PM »
Scottish, Thanks. So lucky again that I worked for the state government and they allow retirees to keep their insurance ( the retiree pays the full monthly premium). So a lot of planning and a whole lot of luck!

 

Wow, a phone plan for fifteen bucks!