Why is the Retirement Age Increasing, and What Can Seniors Do About It?
Experts from Government, as well as peripheral groups like the insurance giant American International Group (AIG), all agree on one thing - an increase in the retirement age for seniors is an unavoidable fact. What is disturbing, however, is that these experts are predicting that eventually the retirement age will reach upwards of 80 years old. It is looking highly doubtful that the American economy will be able to provide for the millions of senior citizens reaching retirement age, and seniors will likely have to work 10 years or longer past the traditional retirement age of 66 in order to simply make ends meet.
How in the world did we get here? Whatever happened to the pensions of yesteryear that allowed our parents and their parents to enjoy their golden years in relative financial ease?
For starters, the recession caused a lot of investments to disappear, which put a huge burden on people whose retirement was imminent. For many of them, their savings were barely adequate to start with. Our collective mindset as a nation has been to spend beyond our means for several decades, and the national personal savings rate has been almost non-existent. To put things into perspective, the personal savings rate of the 1920's was about 26%; the personal savings rate in 2005 was Zero. Anything we have been saving is basically inadequate for retirement, and for those who took saving seriously for their retirement, the stock market free-fall the second half of 2008 didn't help as they watched their nest egg shrink.
We also have the Baby Boomer generation coming of age, and the sheer numbers of seniors who will be tapping into Social Security and Medicare simply cannot be sustained by the citizens still working without creating a collapse of the American economy.
For starters, the recession caused a lot of investments to disappear, which put a huge burden on people whose retirement was imminent. For many of them, their savings were barely adequate to start with. Our collective mindset as a nation has been to spend beyond our means for several decades, and the national personal savings rate has been almost non-existent. To put things into perspective, the personal savings rate of the 1920's was about 26%; the personal savings rate in 2005 was Zero. Anything we have been saving is basically inadequate for retirement, and for those who took saving seriously for their retirement, the stock market free-fall the second half of 2008 didn't help as they watched their nest egg shrink.
We also have the Baby Boomer generation coming of age, and the sheer numbers of seniors who will be tapping into Social Security and Medicare simply cannot be sustained by the citizens still working without creating a collapse of the American economy.
Welcome to Your Encore Career
Seniors are beginning to embrace the idea that their retirement years will include some type of career - perhaps not one that pays as much as before, but that will delay having to dip into their nest egg, allowing it to continue to grow while they provide for their financial needs through work. It may be full time, or only part time, but most of us will have to work well into our 70's in order to have a nest egg that will provide for us when we simply are physically incapable of working any longer.
Former corporate executives might spend some time consulting on a part-time basis. Some seniors take an area of interest and launch a money-making venture in that arena, such as an art buff working at an art museum teaching the younger generations about their passion, or a former journalist taking a job for a small-town newspaper as a columnist. And fast food giants are quick to hire senior citizens for many types of positions, whether cashier, cook, or manager, knowing that they bring with them a serious work ethic that Generation Y simply doesn't exhibit in many cases.
Former corporate executives might spend some time consulting on a part-time basis. Some seniors take an area of interest and launch a money-making venture in that arena, such as an art buff working at an art museum teaching the younger generations about their passion, or a former journalist taking a job for a small-town newspaper as a columnist. And fast food giants are quick to hire senior citizens for many types of positions, whether cashier, cook, or manager, knowing that they bring with them a serious work ethic that Generation Y simply doesn't exhibit in many cases.
Life Insurance Policies Are Still Important
When you reach your golden years, one of the most rewarding things you will experience is the joy of seeing your children start their own families. This is not a time to leave them with difficult choices at your passing. While traditionally a policy tends to be a very pricey venture for seniors, there are some organizations that are striving to provide affordable policies to the elderly, including policies where no physical exam is required. The best advice for seniors in this position are to get a good selection of quotes; consider the company's reputation before signing on the dotted line; understand that the longer you wait, the higher the price may become. A whole life policy is generally the best bet for anyone over 60, particularly if you have any pre-existing health conditions. Additionally, life insurance policies can be an excellent way to transfer your estate to your heirs when you pass away.
Your policy should be adequate to cover the following:
Your policy should be adequate to cover the following:
- Your burial expenses and any remaining debt, which a whole life policy can adequate cover
- Any remaining dependents who may not be able to provide for themselves, such as a spouse or a special needs adult child