By Skyline On Thursday, March 08 th, 2018 · In

FIELD NOTE: MARCH 2018

WORKING AFTER 65: FUTURE OR FALLACY?

A 2017 study found that 48% of retirees leave the work force earlier than planned.

Reasons for Forced Early Retirement

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Due to improved health, changes to Social Security, and a decrease of pension plans, the average retirement age has steadily risen over the past 30 years. However, compensating for inadequate retirement savings by prolonging one’s career is not always a feasible route. As of 2015 67% of workers expected to retire at 65 or older, but only 23% of current retirees were able to work after 65. Workers expecting to pursue an encore career have a similar experience; 67% of employees plan to pursue an encore career, but only 27% of current retirees reported working for pay in retirement. Unsurprisingly, those who retire due to job loss, health reasons, or job stress report worsened financial security.

Education level has been positively correlated with increased work capacity. Since 1972 the average improvement in self-assed health has increased most for men and women in the top education quartile (39% and 34% respectively), and significantly less for those in the lowest education quartile (19% improvement for men and 15% improvement for women). Research suggests that it is easier for individuals of high socioeconomic status to extend their work life due to disproportionately improved health.

Percent Women Working By Education

Percent Men Working By Education

Only 24% of current workers and 39% of retirees report consulting a financial advisor. 41% of current workers claim to have approximated their retirement expenses and income, but statistics reveal that actual retirement expenses can vary widely from employee expectations. 47% of current retirees report their retirement healthcare expenses to be “somewhat higher” or “much higher” than expected. Only 13% of current retirees overestimated their healthcare expenses. Thankfully Skyline takes the guesswork out of retirement planning. By preparing clients for the worst but always expecting the best Skyline espouses thoughtful preparation and flexibility for the unexpected. Contact a Skyline advisor to receive a tailored financial plan.

Sources: JP Morgan 2016 Guide to Retirement, EBRI 2016 & 2017 Retirement Confidence Survey, National Bureau of Economic Research: Health Capacity to Work at older Ages

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