Fiduciary Is Fun!
(a.k.a. I heart taxes)
(a.k.a. I heart taxes)
I was recently reading an article from the Pension Research Council of the Wharton School of Business and came across this little nugget from Olivia Mitchell from the School, “the baby who will live to be 200 has already been born.” Does anyone think this is a good thing?
Regardless of whether or not Ms. Mitchell is correct, the key point she is making is that people are living longer than they once did. On the whole, this is probably a good thing, right? However, it also raises some obvious issues. The first one, and one that has been noted many times in the financial press, is how are individuals going to plan for what could be a prolonged period of retirement? 100 years ago, retirement was a relatively short period of time. If Ms. Mitchell is correct, retirement in the future could last 100 years?!
The truth is probably somewhere in between, of course, but what will be the consequence for those who have not saved enough for a prolonged retirement, whether that be 20, 30, or even 40 years? Many people say they want to continue or will continue to work into the years that would otherwise be defined as their “golden years.” This is great, if they are able and allowed to do so. Let’s explore that last point
According to a study by ProPublica and the Urban Institute, between 1992 and 2016, 56% of older workers reported either being laid off or pushed out of a job at least once in their older years. Once reemployed, only 1 in 10 reported earning at or above the rate they were making. Rehiring older workers has always been a challenge, and remains so today, even though there are more and more older workers desiring to work!
What’s it going to take for employers to get more comfortable hiring older workers? Obviously there will be a large pool of such older workers available who need and want to work in the future. If we continue to harbor a bias against older workers, how are these individuals going to support themselves in their older age? This situation is going to get uncomfortable for all parties in the not too distant future
We can’t change society in a blog post, but we can at least take accountability for ourselves. If the thought of a prolonged retirement has you concerned and working into retirement is not your first option for several reasons, it is probably time to put together a plan. After all, no one wants to be 150 and standing in line for a job
Give me a call.
Pete Welsh a/k/a 401kGuy