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Working Longer and Your Retirement Plannning

As DAVE CARPENTER, AP Business Writer recently wrote ÒAmericans are changing the game plan for retirement, with millions laboring right past the traditional retirement age and working into their late 60s and beyond.Ó

But are they doing what they want to do? Next time you are at the grocery store, count the number of aging workers who are employed. The hustle shopping carts, wait on you at the deli counter, and do jobs that you might have previously viewed as entry-level work for teens and college students.

While AARP reports that 27 percent of workers age 45 and over, and 32 percent of those 55-64 said they had pushed back their planned retirement date because of the economic downturnÓ perhaps portrays a single reason why we work longer.

There are three things that could be learned from this:

1. Teach your children how to pursue a career that will allow them to work fruitfully for over sixty years. This is a departure from teaching them about finances because, over that period of time, they will have had the opportunity to fail at whatever risky undertaking they endeavor to undertake three to four more times than we did growing up. For most of us, one failure after forty, such as a divorce or serious disability will have set the tone for our retirement almost as much failing to save enough.

2. It would be out-of-character for me not to suggest you still stress the benefits of saving early on (which is still a good idea even if the new early-on is forty) but instead to outline the necessity to stay healthy - you will need this to be able to work that long.

3. In reference to the stock market, the truth is, with that kind of potential longevity, I am beginning to tell folks that these target dated mutual funds and any other financial tool that promises to grow your money more conservatively as you age be reconsidered. It is true that pensions, which I refer to as the great "economic stabilizer" for the remaining 21% of the nation that still has them, are what more of us should have.

But on the other hand, the stock market losses that people are feeling may not yet have completely wiped out all of the gains you may have.

Consider this: Just ten-years ago, the S&P 500 index opened in January 1998 at 980.28 and even with the devastating markets that have occurred in the meantime and down from a high of 1517, that index is still up 20%. That may not be great money but it is still pretty good. And if you continue to invest evenly and consistently, which a 401(k) allows you to effortlessly do, you will, I firmly believe, still be okay. I just wish I could say you wouldn't have to work - at least a little.