The Changing Face of Retirement

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Saving for Retirement RibbonThere’s an ideal out there about what retirement should be like. When you wake up at 65, you quit your job, collect some Social Security, take distributions from your investments, consult with your Portland financial advisor on occasion, and play with the grandchildren. Does this sound familiar? It’s a wonderful sentiment, but it’s become increasingly harder to make this work in reality. Here’s why.

People are Living Longer

When the concept of retirement was originally put forth, it came with the expectation that you might live for perhaps a few more years. The retirement age largely hasn’t changed since then, but life expectancy has shot up by almost 30 years from what it was a few generations ago. With such a long life expectancy, more people are spending the latter half of their adult lives trying to survive on what they earned and accumulated from the first half.

Social Security is Evolving

Tragically, Social Security is not as secure as its name would have you believe. This is another bait and switch, as it requires a ratio of at least 3 workers per retiree to work properly. By 2030, America will only have 2 workers per retiree, which means it’s a risky bet to count on Social Security.

Another aspect of Social Security that’s changed is the Full Retirement Age where you can receive full benefits. It used to be 65, and now it’s 67. The number will probably have to keep going up, so if you are planning to seek full Social Security benefits for retirement, you’d better be prepared to wait.

Pressure to Stay Active

While there are some problems associated with finances in retirement, there are also some big changes in the idea of what it means to be retired. More retirees are staying active and involved in their communities. They might continue to work on a part-time basis or volunteer, either from financial pressures or from a desire to be involved. They’re also more likely to be fit and healthy at the retirement age of 65. This means preconceived notions of retirement are starting to evolve too.

How Does This Affect Your Retirement?

These factors are what they are, but keep in mind that your retirement is uniquely yours. As long as you have the money to live the lifestyle you want, you can retire when it’s right for you. Of course, accumulating enough money is one of the big challenges facing future retirees, which is why you should talk to a wealth manager in Portland who has a lot of experience in retirement planning. With the right advice and a commitment to financial growth, you can live the retirement that you’ve always wanted.