Why Are So Many Americans Choosing To Retire Earlier Than Planned?

- Advertisement -


pew research center It is recently reported that half of American adults age 55 and older are retired. While the number of retired Americans aged 55 and older increased by nearly 1 million per year between 2008 and 2019, over the past two years, the number of new retirees increased by 3.5 million. A rise in household wealth among affluent Americans, rising home prices, a burgeoning stock market, health and safety concerns at the workplace, and pandemic fatigue have all played a role in driving this growth. Burnout has also played a role, prompting key employees of all age groups to leave the workforce in the form of “great resignations”.

- Advertisement -

According to a survey conducted by Actually, more than half (52%) of respondents said they experienced burnout and 67% said that feelings of burnout had worsened during the pandemic. Interestingly, those who worked virtually were more likely to say that burnout had worsened during the pandemic (38%) than those who worked onsite (28%). wall street journal reported that nearly 20 million workers resigned between April and August of this year alone, a resignation rate 60% higher than the same period in 2020, and 12% higher in the spring and summer of 2019, when The job market was the hottest. In about 50 years.

- Advertisement -

Fortunately, this trend appears to be changing. In December, Bureau of Labor Statistics reported that the unemployment rate fell to 4.2% in November 2021, with the number of unemployed persons falling by 542,000 to 6.9 million. Both measures are well below their highs at the end of the February-April 2020 recession. However, they still remain at 3.5% and 5.7 million, respectively, above the levels seen before the pandemic in February 2020.

People aged 55 and older are generally in a better position to leave the workforce than their younger counterparts because of their greater accumulated wealth. However, before taking the leap, you need to understand how you will generate the required income for the rest of your life, especially if you choose to retire earlier than the plan.

- Advertisement -

Remember, the sooner you retire, the longer your savings will last. This can put additional pressure on your investment portfolio, especially during periods of stock market volatility and low bond market returns. Investing too aggressively can set you up for a downturn that you may not have enough time to recover from, while investing too conservatively can result in an inability to outpace inflation over time. .

As with any accuracy, the only way to determine how much you’ll need and how long it might last, is to implement a financial plan. The planning process will help you identify all of your income sources and the lifestyle goals they will need to support. Working with an independent financial advisor to create a retirement income plan provides the opportunity to:

  • Identify and establish your goals for this next important phase of your life
  • Prioritize your goals to ensure you will have the income you need for the next 30+ years
  • Model different scenarios to determine how likely you are to meet each of your goals.
  • Identify any adjustments or tradeoffs necessary to meet your objectives

The financial planning process also helps answer these and other important questions:

  • How will you pay for health care if you are not yet eligible for Medicare?
  • What if you have a revolving credit card or mortgage loan?
  • When should you start taking Social Security benefits?
  • How will the state of the financial market (the sequence of return risk) at the time you choose to retire affect your withdrawals over time?
  • What if you decide to go back to work after a few months or years?

Choosing when to retire is one of the most important and impactful decisions of your life. So, it is not something you can guess or leave to chance. If you have questions about whether now is the right time for you to retire, get started by downloading our complimentary guide, 8 mistakes to avoid in retirement,

,

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox