Many people have concerns about having enough money for retirement.
According to the article, Two Changes That Will Improve Your Odds of Retiring, working longer and living a more modest lifestyle can help improve ones chances of retiring. Especially for someone over 50 who does not have as much time to contribute to their retirement account, this may be true.
When RetireEasy asked, Would you consider working longer, changing your standard of living, or doing both to help your retirement funds last longer? on LinkedIn, we got a variety of responses.
The main themes were:
- Develop a lifestyle plan. Instead of focusing just on retirement, design a plan that accounts for how much you want to work, how much you want to pursue other interests, and what lifestyle you want to lead. This is a more holistic approach, and gives you the freedom to choose something outside the traditional retirement model. It also takes into account how active you want to be. Teral McDowell responded, “Retiring is not the necessity; staying active is. Activity promotes health and a healthy lifestyle will help keep more of those dollars in our pockets longer.”
- Continue to work if this fits your plan. If you enjoy what you do, it might not make sense to exit the work force at 65. As Stephen Fowler put it, “plan twice and retire once” so you do not end up leaving a job that you would have preferred to keep for a few years. Other people may want to switch to part-time work or change their line of work. Amelia Anderson added, “Perhaps ‘retirement’ will no longer mean when you stop working, but when you start working in a different way and for different reasons.”
- Saving is still important. Regardless of the options you choose above, if you are continuing to work, you should continue to save, and if you decrease your spending, you should save the difference.
Finally, H. Jude Boudreaux, a Certified Financial Planner from Upperline Financial Planning adds the following perspective:
I think that you have to keep all of those options available to you. Working longer could mean working fewer hours at your same company, or possibly getting paid less but doing work that you’re passionate about.
However, understanding spending habits is also important. Some money has to be spent regardless of what is happening in the economy, while some is discretionary. By knowing what the baseline is and what is extra, clients have a few different levers to pull when balancing the retirement income equation. Work a little bit more, spend a little less, or a combination of both.
It’s also worth mentioning that the other side is true. When things are going well, they might retire earlier, spend more, or work less.