CAREERS: Retirement
Usually, we at btw use the Careers feature as a way to explore possible future career paths that students might be interested in exploring. With this post, however, we will be delving into what happens at the end of your career: in other words, retirement. While this may seem a million years away to you, retirement for today’s young adults will probably look quite a bit different than it did for their parents and is something that it’s never too early to start thinking about. Read on to learn more.
What Does Retirement Look Like Today?
So here’s how retirement works: you put in thirty years or so at a job or career, and when that’s over, you get to spend the rest of your life doing what you want. Right? Well . . . no. Or at least, not anymore. Today, more older adults than ever are continuing to work: in fact, about one out of every four adults age 65 and older are still in the workforce.
Why Are Older Adults Still Working?
Some continue to work past what we normally think of as “retirement age” because they love their job and don’t want to give it up. But far more frequently, the decision to keep working well into old age comes out of necessity. This is because, when you retire from a job, you receive a monthly “fixed” income for the rest of your life that doesn’t rise with inflation, so that as the costs of living become more expensive, it can be more and more difficult just to get by. Also, many retirement funds are linked to the stock market and have been deeply affected by the crashes of recent years.
Even worse, many seniors don’t have retirement plans at all. At the moment, in fact, roughly half of private-sector jobs don’t offer any kind of retirement benefits. So what happens to you if you work for one of those companies? Once you retire, you are dependent on Social Security from the government (currently, about 25 percent of retirees are almost completely dependent on Social Security as their source of income). But that amount isn’t nearly enough to live on, particularly with the rising costs–such as health care–associated with old age. And most people facing retirement today have only saved up about $150,000, which isn’t nearly enough to get them through many decades of retirement.
At the same time, older adults today face many unique economic challenges that previous generations have not. For example, as health care costs continue to rise, medications and trips to the doctor can eat up a larger and larger chunk of a person’s monthly income. Other seniors face additional expenses such as grown children who still live at home, or continuing to pay off grown children’s college loans–increasingly a reality as the cost of a college education continues to rise astronomically.
What Can I Do To Avoid This?
Financial experts say that the time to start saving for retirement is with your first paycheck. Ideally, take a job with a company that has a robust retirement plan–such as a 401(k)–that you can start putting money into right away. Also, though it’s difficult, try to save as much money as you can. Analysts advise that your goal should be to live on 85% of your paycheck and put the remaining 15 percent into savings or investments. Many apps exist to help you keep track of your spending. And finally, do what you can to avoid unnecessary debt, such as credit cards.