Last Updated: June 8, 2009
The recession has taken a toll on nest eggs. So much in fact that half of all working adults ages 50 to 64 say they may delay their retirement — and another 16 percent say they never expect to stop working, according to a national survey recently by the Pew Research Center's Social & Demographic Trends Project.
Among those with family incomes of less than $30,000, 44 percent have thought about postponing their retirement, compared with 37 percent of those earning $100,000 or more, according to the report. And, more than a third of those making $30,000 to $50,000 (36 percent) and $50,000 to $100,000 (38 percent) have considered working longer as the recession settled in during the past year.
No matter your income or your age, financial planners say delaying your retirement or postponing it indefinitely does have its benefits, both financial and otherwise. Working longer can help you rebuild your nest egg or reduce the need to take Social Security or draw down your retirement assets. Working longer, whether out of want or need, can also help you stay mentally active. Financial planners suggest that you should approach the decision to work longer with a bit of forethought. Here are some things to consider:
Plot to Escape
"Consider the 'plot to escape' to new work that you like better," said FPA board member, Bonnie Hughes, CFP®, of The Enrichment Group. "Some people want to retire with some fever simply because they can't stand the work or work environment they are in as they wind up a career."
So if you want to continue working, you should start to shape what that looks like. Are you going to be your own boss? Do you want to turn your hobby into income? Do you have some hidden talent that others will pay to enjoy? Or do you just want to do something with less pressure? You can find out more about working in retirement at Web sites such as RetirementJobs.com, retiredbrains.com, and aarp.org/money/work/.
Research suggests that people, and in particular men, who don't find a replacement activity for their intellectually challenging main career can suffer more problems in what we now call retirement. "If you begin to redirect that energy into something that has less pressure you may find great contentment in a new way," Hughes said.
Patience is a virtue and so too is perspective. According to Hughes, you'll need plenty of perspective should you start a new venture or start a new career late in life. "Remember, she said, "it likely took you more than 20 years to be good at what you did and get paid for it. In your new venture, unless you are quite lucky, some amount of time will pass before you gain the financial rewards for your efforts."