Though some young Americans aim to retire by age 60, statistics show that they ought to accept that they’ll probably be in the workforce for a whole decade beyond that. That means 10 more years on the clock, saving up for retirement. Due to a host of different factors, hopeful retirees will have to adjust or abandon their current plans for their golden years. Here’s just why young people should expect later retirements—and what they can to do improve their future financial standing.
- They’re accepting Social Security at the right time—or the wrong time. Social Security can be a huge financial blessing in your golden years. After years of paying into the system, you’re getting just what you need. However, if you start drawing from your Social Security too early, as opposed to waiting longer, this can negatively impact your future finances. Go through your budgeting and retirement plans and determine just how long you can wait to access your Social Security. A good rule of thumb is to delay accepting your Social Security as long as you possibly can before tapping into it. If you can wait until age 70—the new average retirement age—you’ll be in the best shape possible.
- Spouses can change everything. Over the past few years, the average marriage rate has decreased by about 6 percent. Being married can completely change your retirement plans—for better or for worse. Weddings, children, and larger houses are among some of the bigger costs in married life—along with potential divorce. However, when it comes to retire, having a spouse can be a huge asset. After all, you have two people’s investments, savings, and assets coming into the equation.
- The labor force is shifting. Ask any group of college students, and they’ll most likely have a story about a grueling unpaid internship or two. While internships can provide enlightening experience, they can also put a dent in your retirement fund if they’re unpaid. Because of them, many people spend months and months working away without getting financial compensation, so they can’t save much. Plus, because many interns are students, it’s nearly impossible to add a paying job into the mix. Ultimately, this practice is one of the biggest reasons why young people should expect later retirement.
- College costs! Many young people flock to universities instead of trade schools or rather than joining the workforce immediately. While this results in a diverse, knowledgeable workforce, most former students carry large amounts of debt. Instead of saving for their future retirement, they must pay off their college costs.
- Life expectancy is soaring. At last, a positive thing! Because of the high quality of healthcare and advances in technology, Americans will live longer on average. This means more time with loved ones, trying new hobbies, and exploring the world. However, it also means that nest eggs need a larger cushion.
Though there are several reasons why young people should expect later retirements, it’s still possible for them to enjoy the fruits of their labor in their twilight years. By saving—and investing—responsibly and working hard, they can counter a large percentage of their economic problems.
Speaking of investing—if you want to save for your retirement through money-protected investments, call the financial experts at Ty J. Young Inc. at 877-912-1919. To learn more about how to maximize your money, continue to read our useful Retirement You’ve Earned Blog. Happy saving!