BLOG

Work Till You Drop

July 31, 2019

                 

There’s a quote I’ve seen floating around from time to time that says, “The key to keeping your balance is knowing when you’ve lost it.” I’m sure whoever said this first didn’t have the retirement industry in mind, but it mimics the advice I’ve found myself giving out over the years to many pre-retirees.

   There’s a quote I’ve seen floating around from time to time that says, “The key to keeping your balance is knowing when you’ve lost it.” I’m sure whoever said this first didn’t have the retirement industry in mind, but it mimics the advice I’ve found myself giving out over the years to many pre-retirees.

                Before jumping in, let me say one thing: I am guilty of being a workaholic. As someone who probably won’t ever be able to take his own advice, I know how easy it can be to fall into a rhythm of saying you’re planning to retire soon, and yet every new year finds you seated back at your desk at work.

Working offers the promise of familiarity in our lives; you have a constant schedule, a constant paycheck, and a constant identity guaranteed to you as long you’re employed. Many of the clients I’ve met over the years don’t retire not because they can’t, but because they don’t want to. They don’t know what to do other than work!

                While finding a purpose in retirement is its own conversation, one sentiment I’ve seen from time to time is pre-retirees whose retirement plan is to just keep on working because they don’t think there’s another option. They don’t feel the need to plan for retirement since hey, why bother to plan or save for something that isn’t going to happen?

                The problem here is two-fold. For one, if you’re over the age of 50, you’ve got a nice target on your back for getting let go by management in favor of the younger generation. Forbes recently did a survey of around 20,000 people over the age of 50 in full-time employment that found over 56% of those who responded were laid off at least once from their jobs. When finding a new position, 90% of them of never earned as much money as they did in their prior position.

Let’s theorize you earned $70,000 a year by the time you hit your 50s. You’re suddenly let go but find a new job quickly, with a 10% pay cut. You’d drop down to $63,000 a year, not to mention the potential loss in benefits. Keep in mind this is a generous estimate too—who knows how quickly you could find that new job, or how much you might really be taking in the loss to pay or benefits?

                Let’s say you know for a fact your job is safe—maybe you’re self-employed or you’re just at too high of a level to have your position at risk. While your job is safe, what happens if life gets in the way of keeping up your work schedule? We might not like to face it, but our health and the health of our spouses becomes more tenuous as we age. If something happens and you don’t have any sort of back-up plan in place, what do you do if you can’t physically work yet also don’t have any sort of retirement portfolio to fall back on?

                The point here is that pre-retirees must find a balance. If you veer into the range of having no alternative to keep your roof over your head other than working, you’re setting yourself up to be put between a rock and a hard place. I know how hard it can be to start having to accept the fact that retirement might not be something you want to do, but rather need to do. Even if that’s the case, you will be a thousand times better off having a strategy in place when that day comes than trying to scramble together funds to keep your family afloat on a drastic income change.