Adjust Your Retirement Expectations

I apologize in advance this week. This is not a funny or even a nice slap. It’s for those of us who plan to retire at a certain age. My only advice: Good luck!

Let’s start with the starkest numbers: Only 33% of boomers retire when they plan to, and 60% report they had to retire sooner than they had planned.

Some of the reasons include health, firings, layoffs and caring for an elderly or sick relative. Whatever the reason – few of us make it to our target date.

Thirty-nine percent plan on working to age 70, mostly because of financing issues. That seems reasonable considering our life expectancies – but only 4% of them make it to 70.

Only 9% plan to retire before age 60, and for good reason: That’s pretty young for folks our age. But 39% end up checking out before age 60. That’s young!

Planning for retirement is a good thing, but the numbers indicate we should not be surprised if we don’t make it to our planned work world exit date.

In fact, the data says we should probably expect our plans to not work out.

But as bad as some of the numbers are for the boomers, they are showing signs of improvement.

Today, 4.6% of women and 2.9% of men claim their Social Security benefits at age 70 or older. When you consider you get a 132% increase over the full retirement age benefit at 70, those numbers seem low.

But 10 years ago, it was 2% and 0.8%, respectively. So more are working longer, but not many more.

One of the reasons for the increasing number of people working longer was the incredibly low interest rates we earned during the zero interest rate years under then-President Obama.

Another is education. Recognizing the need to work longer and claiming Social Security later are making their way out there, but not enough. And of course, even when people know that waiting to claim is important, it doesn’t mean they can do it.

What adds confusion and consternation to all of this is that we’re living much longer than any of us ever expected. The average retirement is now 18 years, and it’s as much as 30 years for some.

We’re checking out so early, many of us will exceed those years in retirement estimates. That’s a long time to be below or near the poverty level.

Maybe the biggest slap in the face of all is that so many of us have ended up in such dire straits. This isn’t what we dreamed we’d be in retirement.

If you’ve got the time and the health, do what you can now to make your golden years a little sunnier.

I read an article recently by a guy who was a retirement writer for eight years. He described them as the most depressing years of his life. I can understand his pain.

I promise I’ll try to be more upbeat next week. Thanks for tuning in.

Good investing,

Steve