11/22/2011 5:49 PM ET|
For many, no retirement at all?
Interest rates are at practically zero, and nest eggs have been battered by the stock market. And so many seniors find themselves still working -- or looking for a job.
When Angela Gregor's mother became ill and needed long-term care in the 1990s, Gregor tapped her individual retirement account for funds and stopped making contributions. Then came the tumultuous stock-market ups and downs of the past decade, dealing the IRA another blow.
To make ends meet, Gregor went back to work part time in September, as a data-entry clerk at a senior center near Chicago. The 67-year-old hopes to retire by age 70, but says she'll have a hard time doing so if she can't sell her home.
"Everything is more expensive. I cannot retire, I wish I could," says Gregor. "Like most older people, my money is in my home. . . . I'm caught between a rock and a hard place."
Many older people are finding themselves in a position they never expected to be in at retirement age: still working or in need of a job.
And the laundry list of reasons just keeps growing. Already-battered nest eggs have taken beatings lately with the market's wild swings. With interest rates essentially at zero since 2008, income from Treasurys and certificates of deposit is pretty paltry. And the Federal Reserve recently said it would likely keep rates "exceptionally low" through mid-2013. On top of that, housing prices are still in the doldrums, leaving homeowners with much less equity to tap.
More than three in five U.S. workers in their 50s and 60s plan on working past 65 -- and 47% of that group say they'll do so because they'll need the money or health benefits, according to a 2011 study from the nonprofit Transamerica Center for Retirement Studies.
But in this tight labor market, working into your golden years isn't easy. And you'll have to make your age and years of experience come across as assets, not liabilities. In addition, with the current market upheaval, you'll need a financial plan that puts your savings on the fast track and takes into account how Social Security and Medicare benefits could be affected.
Staying the course
For many older workers, the easiest option may be to continue with their current employer. But that will entail making themselves essential.
Workers should take on new projects when possible. And it's crucial to stay on top of the latest technology; you don't want to be perceived as the old guy who doesn't know what's going on.
Older employees also can put their experience to use -- and on display -- by volunteering to mentor younger workers either formally or informally.
Dave Bowe, 70, says he has kept his position at Stacy Adams Shoe since 1977 because he has continued to be one of the men's footwear company's top-selling sales representatives. He says working has helped him pay for expenses related to his wife's disability and keep insurance that covers her medical expenses, though he also enjoys the job.
Bowe says he stays close with longtime customers, answering their calls at night or on weekends. When he had to cut back on overnight travel when his wife became disabled, he made up for lost business by aggressively pursuing new clients closer to home.
"I have to produce, or the company wouldn't let me work out here," says Bowe.
Of course, some workers may have to take illness or physical limitations into account. If you feel like you can no longer manage physical labor, late hours or travel, talk to your manager about moving to a different position, says Beverly Harvey, a career coach in Pierson, Fla. Suggest the position you'd like to move to and show how you're qualified for it, she says. If your boss is the one initiating such a conversation, chances are your standing at the company has already suffered.
Another option is phased retirement programs that let workers gradually reduce their hours, says Cornelia Gamlem, the president of human-resources consulting firm Gems Group. There also are job-sharing arrangements, she says. For instance, if you and a co-worker are both thinking of paring your work hours, approach management with a plan detailing how you could divide your time and responsibilities.
Just keep in mind that a change to your full-time status could affect your eligibility for benefits such as health insurance or a 401k match.
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Finding employment outside your company will present more of a challenge, because you essentially have to prove yourself from scratch.
Ideally, you want to seek work within the same industry to take advantage of your network and work experience. If you look in a different field, figure out what skills you have that can translate into a new role.
When Gregor interviewed for her position at the senior center, she highlighted the computer and accounting skills she'd honed in decades of office work, even though she had most recently worked as a home health aide.
Some employers are known to hire senior citizens. AARP has a directory. Search for "National Employer Team." Some temporary-employment agencies, including Kelly Services and Adecco, specialize in placing seniors.
While you may need a steady paycheck to pay the bills, you'll still need to save for when you eventually stop working.
Workers age 50 and older typically can contribute an additional $5,500 to a 401k annually and an extra $1,000 to an IRA. You also can get a tax credit of up to $2,000 annually if you contribute to a retirement plan and make $55,500 or less (for joint filers) or $27,750 (for single filers). (Should you convert to a Roth IRA? Check MSN Money's calculator.)
You generally don't have to take required distributions from your 401k as long as you keep working for the employer offering the plan -- regardless of your age. But at age 70, you'll need to start taking annual distributions from a regular IRA. So make a plan to set aside or reinvest as much of those distributions as you can afford.
Hold off on taking Social Security benefits as long as possible; the longer you wait, the higher your monthly benefit will be. If you keep working, benefits are likely to be subject to federal income tax and may be further reduced if you take them before full retirement age. Finally, if you're using Medicare, keep in mind that your premiums are determined by your income.
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Many folks have to work into their 60's and 70's. But "Public Servants"(goverment workers) are not in their numbers. They usually walk out the door in their 50's with generous pensions. The "Masters" (taxpayers) must cpontinue to work so their "Public Servants" can retire.How does that make sense?????
I am 60....I have weathered, ( like others before me), recessions and depressions for most of my working life. My home is worth about a third of what is owed on it. There are few employment opportunities for people my age, age discrimination is alive and well in the U.S. I find myself unemployed in a labor market where there is a surplus of workers. This is encouraged by open door legal and illegal immigration, outsourcing of jobs overseas and the dismantling of our manufacturing infrastructure
This is the nature of the beast, this global free market economy where the worker will always be on the losing end, unemployment, poverty and for many bankruptcy will be the end result. Retirement is something that our parents dreamed about a long time ago.
Maybe the AARP should change its name to the AAWP (American Association of Working People) because if current trends continue, that's exactly what it's going to be for Seniors now and in the future. I'm almost 50, had my 401K decimated by Wall Street, a layoff, and losing our house in the interim. The only jobs I've been able to muster up are temporary positions here and there. "Temping" sucks at any age; no steady income, so job security, no insurance and NO FUTURE!! Right now, the greeter's job a Walmart is starting to look pretty good. Fortunately my spouse has been able to pick up the slack but since we're basically having to start over from scratch, it's been kinda hard to put anything aside since we're on one income. We've cut back on everything possible and it's still tough.
And to think current Republican mentality is to PRIVATIZE Social Security. Were they in a COMA for the past decade??!! I wouldn't trust Wall Street with my penny jar right now much less my retirement, especially after what happened with my 401K. Liars and thieves, all of them!!!
I know that the government should cut back on spending and I understand that social service programs take up a big chunk, but I've paid into it for many, many years myself. I would even be OK with Medicare vouchers only on the condition that the government REGULATES the insurance companies and keeps them from raising rates every time the CEO farts. But that would mean compromise and working together for the betterment of the citizens of this country. Congress seems to have trouble doing that right now and who continues to suffer?! US!
Meanwhile, my spouse, God bless him, keeps trudging off to his job, outworking and outsmarting his younger counterparts all the while and hoping the company doesn't find some stupid excuse to put him out to pasture. He says that his retirement plan is that one day he'll just call in dead.
Past 70 and still working, to pay the bills, especially the real estate tax. Yes, the home that I love is worth more than I paid in 1987; however I don't think I should be forced to sell because the local government wants to build more dog parks, add more sculptures, and pay off workers with double dip pensions. The real estate bubble gave government the excuse to spend more and raise assessments and taxes. Now that the bubble burst, it's funny how the assessment only went down 1%.
I don't plan on retirement. "Retirement" has always been a 'rich man's ideology'. I've worked hard all my life--spent time with my children, tended to my parents, paid my taxes, gave to charity....... 4 times I tried to save money: in IRAs, 401s, and each time the hardships of life forced me to cash them in to survive. I've seen what 'retirement' looks like: long solitary days and nights sitting in a wheelchair, lined up with all the other forgotten elders, in a hallway stinking of urine.....while the long-saved monies of retirement are spent on a little, twin sized bed, next to another little twin-sized bed in a room smaller than my former bathroom--while workers speaking English as a second language roam in and out freely amongst my last mementos of an entire life-------without so much as a knock on the door. Yes, I do so look forward to this...comfortable retirement: 'housed' in a facility pleasing to my kids--who chose it so I, their loved one--me--'would be well looked after'---and will maybe, visit me once a month.
I so look forward to this...........knowing I've saved money over an entire lifetime to end up wondering: what did I do to deserve this? No, I'll never even be able to retire--I can't afford it.
I refuse to live long enough to be abandoned by a family I raised, and see them force a smile, hold my hand, with guilty tears in their eyes---visit me--all the while wishing to God they never came, and do so only out of guilt (or, more commonly, trying to ensure I remembered them in my will). No, I will not retire. I will not grow old, and sick--only to be abandoned to the care of strangers----because my 'loved' ones can't bear to see me as I am--and wish only to remember me as I once was. I can't---because I remind all the 'youngsters' of this society of their own mortality.....and in this American society that is a sin: it is a sin to grow old , and die. So, I won't. I refuse to try to save another dollar for 'my retirement'---I am spending it all now while I can enjoy it!! I will not leave a penny for my loved ones (I already spent it all on their childhoods, anyway). And when its all gone, and I can't 'spend' it as I please---I will leave this earth-----on my own terms. I lived by my choices---I will die by them as well.
I will work and earn as long as I am able--and when society determines I am no longer 'able' I will leave. I will not become a burden to anyone; nor will I become a 'check' from the government for anyone to cash.......sign me: A Long-Term Care Facility Nurse. (yeah, I'm the one who has taken care of those forgotten elders, enlisted into my care by their loved ones--to die apart from them).
For many, no retirement, at all?
So much for the TP/Republican bovine feces about investing SS funds into the stock market. The Golden years have become the golden fears, while the bears are on the prowl. It is time to put an end to the trickle down theory, before we are all slave from the grib to the grave.
Gee, I really hate to add the word "Blame", none the less it is fitting and there is plenty to go around regardless of your political slant. Our law makers on all levels are responsible. They have allowed the special interest to have their way over time and now we all share in their short sighted decisions. Unfortunately those special interest cover nearly every facet of our daily lives, solving the issues will not be effective by pointing fingers at those you deem favored. Taxing the rich will not prove be the answer but neither will class division lead us to an sustainable economy. This is not a question of haves and have nots as portraited by our leaders rather a question of are we true American's going to sit by and allow our leadership to reduce our nation's stature through misuse of our money? Are we going to continue to tolerate special interest's political favors plus allow our goverments to tax us for their benefit? Or are we going to continue to allow those interest's to sway our politicians with money and power. Until we as citizens stand up and force both the politicians and special interest to relinguish their propensity to hide their dealings will we return America to the owners.
For the last several years our government has become disgusting. Our leadership continues to advance their salaries and benefits without so much vote even though they have through their own actions made life considerably less for the average citizen. Even our local leaders prove their poor judgement by spending our money on projects that are for the benefit of a very small precentage of our citizens because our politicians deem their actions to be for the public good. It is about time for a political reality check!
Another line that irks me:
"If you keep working, benefits are likely to be subject to federal income tax". What? What the hell is the reasoning behind this? How does this seem even remotely fair, again for something you have no choice but to participate in? If you meet the age requirements, it should not be taxed just because you continue to work and continue to pay into said system.
Just face it. The politicians and the rich know how to manipulate the system to their benefit to the detriment of the majority. Unless you know how "to play the game" just consider yourself a pawn. The rich and powerful don't want such a large population anyways. Shot of whiskey and a bullet indeed.
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