Of all the reactions to the daunting financial challenge of
preparing for retirement, the one that bothers me most is this: “I’m never
going to retire anyway, so what does it matter?” This mindset has grown over
the last several decades, as more Americans cling to the idea that working
longer is a viable solution to bridging the shortfall in retirement
savings. According to a new Harris Poll conducted for the Nationwide
Retirement Institute of 1,291 adults age 50 or older, four in 10 respondents
say that they don’t expect to ever retire—in part because they’re
terrified of having to pay out of their own pocket for medical care and
The idea of working forever—and staying insured by one’s
employer—may be comforting to some, but it’s completely untethered to reality.
In my mind, it’s worse than saying “I’ll figure it out when the time comes,”
which at least acknowledges that retirement is in fact inevitable, and that the
timing of it is largely out of our control. Of the largest group of
pre-retirees ever tracked (the University of Michigan’s Health and Retirement
Study) roughly 37% of those still working at age 58 ended up retiring earlier than
they were planning.
What forces these early retirements? Basic life events, most
commonly some kind of health shock or diagnosis that makes people either unable
to work—or wanting to spend their time doing something else. To put it bluntly:
stuff happens. People get laid off, or the business they were working for shuts
down. Then there are the family reasons: a spouse’s health problems, having
one’s parents move in, having grandchildren. Interestingly, of all the events
that derail one’s plans, a sudden increase or decrease in wealth in (say, an
inheritance or a major loss in the markets) is the least likely event to
disrupt retirement plans, according a recent survey by the Center for
Retirement Research at Boston College.
Which is a helpful reminder that you can’t simply adjust
your retirement timetable to meet the needs of your balance sheet. With all our
calculation tools and spreadsheets, we can get swept up into thinking that
retirement can actually be scheduled like a performance review. But life is
simply too unpredictable for that. When we retire, just like so much else in
life, is not something we will ever be able to plan for with that much
Preparing for the worst, even while hoping for the best, is
about the only plan that make sense.
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