Continuing on from last week’s post (see below), there are good reasons to delay retirement and some not-so-good reasons. There are many people in the world who simply can’t afford to retire. So here are the more common Not-So-Good reasons to delay your retirement.
1. Not Enough Retirement Savings.
Today, almost 60% of Americans have little or no retirement savings. There are many causes such as underfunded pensions, not putting enough into their retirement accounts, or they take money out early. The reality is, according to the Federal Reserve, of people over the age of 55, the median retirement savings is only $120,000. That’s not going to work, and Social Security is not going to be the solution.
20 years ago, 10% of people over 55 got a divorce. Today that number is 25% and now qualifies for its own category: Grey Divorce. If you are divorced you probably had to split all of your assets including retirement savings and the value of pensions ect. What remains may not be enough to fund the retirement of two households.
3. Little or no equity in your house.
Only 30% of baby boomers feel like they have fully recovered from the great recession. Starting in 2008, property values plunged and many people had less equity in their homes than they owed on their mortgages. While they have recovered for the most part, if you refinanced 10-15 years ago and sunk the money into home improvements, you may now be breaking even. The big contribution to your retirement nest egg you thought was coming from your house is not happening soon.
4. Medical issues.
You or your spouse may have had a debilitating illness or event that made it no longer possible to work. One of you has to still work to make ends meet and maintain health insurance coverage. Your two paychecks, two contributions to retirement savings and Social Security are now down to one.
5. Taking care of a parent.
The cost of assisted living or retirement homes can break the bank. If a parent didn’t have sufficient savings or it was depleted due to medical reasons, you may have no choice but to take them in. You or your spouse may have had to leave their job to provide the necessary care. According to a recent Forbes magazine article, as a result of the costs of being a caregiver, they are on average saving 30% less for retirement than those who are not caregivers.
6. Healthcare Costs.
Cost of healthcare is a big retirement risk. I’ve seen estimates that put medical expenses a couple will see after turning 65 at over $200,000. Thanks to the brain trust in Washington, it hard to be confident that there will be any help soon.
7. Family Support Issues.
Remember those kids you thought left the nest? Welcome to the world of Boomerang Kids. The nest has filled back up with your kids, a significant other and possibly a grandkid or two. We are always parents and when the kids need help, we’ll be there. But at what cost to your retirement?
These are just the most common reasons for having to delay your retirement. This is a reality for many people. Understand that if you are one of these, you are not alone. What’s important is to accept your situation. If you are expecting to delay your retirement for any reason, be proactive and take control of Your Extra Innings. Be creative and design your retirement years on your terms.
In my next post I will get into some of the ways people are doing just that. If you have anything to add or have a question, please leave a comment. Also, if you want to have future articles emailed directly to you, leave me you email address below. Your email address will not be shared with anyone.