THE ERA OF TRADING A LONG CAREER FOR a pension and afternoons on the golf course ended long ago. In its place, today’s retirees face growing financial pressure from multiple directions, including the looming fiscal crises for Social Security and Medicare.
Retirement for the middle or working class is changing more than retirement for the wealthy. The imbalance starts with retirement savings. Although a robust stock market helped turn a record 334,000 people into 401(k) millionaires by the end of 2020, one in three Americans also report that the pandemic set their savings back a few years, according to a Fidelity Investments survey. Americans in their fifties had, on average, $203,600 stashed away in their 401(k)s as of the fourth quarter last year, with people in their sixties reporting savings of only $25,500 more, Fidelity says.
Although most Americans will need to work longer, you have a shot at striking a better work-life balance, allowing more time for other pursuits. That’s good, because the one thing the four following forces shaping retirement in the 2020s have in common is the need for a bigger nest egg.
Flexible work at a price. You can’t be a little pregnant, but in the 2020s you might be a little retired. “Retirement will be less of a binary state. People will find small ways to work and phase out of the labor force,” says Allison Schrager, senior fellow at the Manhattan Institute. The pandemic set up less traditional work and more remote work, she adds, and that’s good for seniors. Many may prefer to work part-time or switch to a less stressful full-time job. Members of Generation X, who start turning 60 in 2025 and are known for being entrepreneurial, may be especially well positioned to work as consultants and set their own hours.
“Older workers value flexibility,” says the Urban Institute’s director of retirement policy, Richard W. Johnson. “They don’t want a traditional 9-to-5 job or to deal with the hassle of commuting, and they are willing to give up some salary to achieve that.”
Although age discrimination still exists, older managers are typically more willing to hire older workers, says Alicia Munnell, director of the Center for Retirement Research at Boston College. But “this also highlights the inequality for people who can’t work longer because of health problems” or the type of jobs they’re in, Johnson says. “They will have much lower retirement income than healthier people or those who can work longer in sedentary jobs.”
Continue reading your story on the app
Continue reading your story in the magazine
4 Trends for the Coming Decade
From how long you work to where you choose to live, retirement will change in ways you may not expect.
WHERE TO INVEST IN
Investors will have to curb their enthusiasm as markets get back to normal.
When to Call In a Professional
For some investment categories, choosing an actively managed fund makes sense.
Shop for a New WIRELESS PLAN and Save Big
Competition is fierce, and carriers are dangling free phones and streaming subscriptions.
PRESCRIPTION FOR 2022 - These Health Care Stocks Should Thrive
Pharmaceutical and health sciences firms are riding powerful demographic trends amid a golden age of innovation.
My Top 10 Stock Picks for 2022
Lower Taxes on Your RMDs
When you turn 72, you’ll have to start taking minimum distributions from your IRA and 401(k). These strategies will help trim Uncle Sam’s take.
How to Choose the Right Payment App
Using PayPal, Venmo, Zelle and other apps is convenient, but there are pros and cons to each.
ENERGY STOCKS - Storming Back
A combination of tight supplies, rising demand and continued economic growth is fueling the energy sector.
Best Sources of Emergency Cash
5 Ways Seniors Can Safeguard Against Cyber Criminals Stealing Their Identity
As the use of personal computers and cell phones has grown over the last two decades, identity theft has surged. One study found that over 14 million consumers were victims of identity fraud in 2018, and that their out-of-pocket costs totaled $1.7 billion.
Where to retire? The search goes on
48 hours to figure out if Palm Springs checks off the ‘musts’ on the list
She Wasn't Happy About Retirement. But The Alternative Seemed Crazy
I wasn’t really thrilled with retirement. I wasn’t thrilled about coming out of it either
Retire, Reboot, Start A Business
More people in the second half of life are taking a turn as an entrepreneur
How Friends Are The Key To A Happy Retirement
The key to a happy retirement is strong relationships
How To Plan For Retirement– At Any Age
One family prepares for its financial future and provides insights for the rest of us.
Dream Of Early Retirement?
Yes, you can get fire’d up and financially free in your 30s and 40s— as long as you do some detailed planning.
Becoming Your Own Landlord Can Boost Your Retirement Income
Why investing in real estate can boost your retirement income.
It's never Too Late For A Second Act
How to start something new late in your career and still protect your retirement.
Old And In The Way At IBM?
In a new lawsuit, former workers say Big Blue targeted their gray hair