After years of work and raising a family, many citizens look forward to retirement. The retirement years give people the chance to travel, explore new outlets of fun, and live out their remaining years in comfort and relaxation.
But things have changed. New social trends and the current climate of the economy have completely changed the way people approach retirement.
Dipping into Retirement Savings
Whether it’s a 401(k) or a private savings account, people spend their lives saving up for retirement in order to support themselves without relying on the government or family members. However, according to an article by Bianna Golodryga, people’s retirement savings might be seeing some drastic declines.
Bianna Golodryga, co-anchor of the weekend edition of Good Morning America, reports that many Americans have begun dipping into their savings in response to the recession, which caused high rates of unemployment and underemployment as well as diminished pay for many workers.
According to Bianna Golodryga, the number of American workers borrowing from their retirement accounts was at a ten year high at the end of 2010. Even more burdensome is that more workers are making hardship withdrawals. This is emergency money taken from a retirement account to be put towards an immediate financial burden, like paying for education, paying off a medical bill, or avoiding a foreclosure.
Staying Busy
Those not dipping into retirement savings are making the conscious decision to stay working past the age of retirement. Employment has surged for those 55 and older as a means of offsetting the harsh economic downturn.
It makes sense. Working longer, after all, gives workers the chance to save up more money, though it also reduces the amount of time to enjoy the fruits of that labor. Those who have worked longer also tend to be much more experienced, which helps employers avoid spending time and money training newer employees.
Pushing Retirement Back
As a result of the down turned economy, many workers have decided to push back their retirement a few years, making 68 the new 65. Working longer means more contributions and compounding to your portfolio while simultaneously improving its longevity.
Delaying retirement beyond full retirement age (until age 70 when you are required to take out distributions) can potentially increase your Social Security benefits by eight percent a year.
It should be noted that the average American lifespan has increased in recent years, so pushing back retirement may just be a natural progression of things.