Retire now? Worst ever timing!


I had only just begun to savour my new status as an empty-nester no longer funding offspring – AKA a DIKE, Double Income Kids Employed – when the recession changed the D to Diminished.

My New Old Self no longer had a full-time job, and less free-lance work was bringing in less pay. Ditto for My New Old Spouse. I soon discovered that many people all over the world are experiencing the last part of their working lives as unexpectedly disrupted, as they’ve watched their earnings, savings and investments go south.

Many older people who are still working have had their hours cut back. Consultants are finding fewer jobs as companies and government departments decide they can do it all in-house. Freelancers are being asked to do more for less, forced to underestimate fees and lower quotes in order to get or keep jobs.

The 50+ age group has been especially hard hit by the economic downturn so we’re supposed to feel grateful that we have any work at all. This isn’t how we pictured the ending to our years of labour. We thought we’d be getting lots of what’s punted as one of the few compensations of growing older: respect (whether you spell it R-E-S-P-E-C-T as Aretha did, or replace the T with a K like a rapper).

Whether we gradually decelerate into our changed working lives or crash-land, there seems to be little in the way of preparation for new ways of living when work is less all-consuming. In contrast to the education and training that brought us into our careers, there seems to be little guidance for our denouement.

If you’re nearing what you consider retirement age, get ready for another downer: right now may be the worst time in a generation to quit working. According to new research cited by the AARP, the biggest US lobbying group for the interests of baby boomers, this depressingly bad timing is due to low interest rates and declining returns on investments.

So acute is the problem that one in four boomers retiring today — folks who under normal circumstances would have adequate retirement income — now risk running out of money in their later years if current economic conditions persists for too long.

Nearly one in 10 workers retiring now are projected to run short of funds if the low yields climate persists for five years. The odds of new retirees depleting their savings goes up to about one in seven if low rates continue for the first 10 years of retirement.

The worst thing about this bad news is that many of us have so little choice in responding to it. AARP (who changed its name, an acronym for the American Association for Retired People, to take out the R-word) offers some advice. But not everyone will be able to follow it.

The first tip is to work an extra five years, in the hope of building up savings and increasing pension pay-outs. Unfortunately the job market may not allow this. Many older people are losing their jobs and not even getting interviews for new ones. Another tip is to pay off debts and mortgages, a good plan if you’ve got the spare cash but many don’t.

Are you doing some transitioning in your working life?
Is a 40-hour work week now a thing of the past?
Do you want to retire?
Can you afford to?
Or have you already been forced into a “semi” version?



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