When planning for retirement, many people target specific age and income goals. However, a new research paper from the National Bureau of Economic Researchentitled "The Power of Working Longer" states that people should approach retirement with a range of options in mind.
Assume you're looking to retire in the next 15 years and you find that projections show that you are running a shortfall in reaching your retirement goals. Most people assume they will have to save significantly more each month to meet those goals, which would oftentimes lead them toward sacrificing current lifestyle. This new paper posits that you could achieve the same result by retiring two to three years later and not increasing the amount your savings.
Assume you're looking to retire in the next 15 years and you find that projections show that you are running a shortfall in reaching your retirement goals. Most people assume they will have to save significantly more each month to meet those goals, which would oftentimes lead them toward sacrificing current lifestyle. This new paper posits that you could achieve the same result by retiring two to three years later and not increasing the amount your savings.
The basic result is that delaying retirement by as little as six months can have the same impact on your retirement standard of living as saving an additional 1% of your salary for as many as 30 years. This is remarkable as many clients come to us looking to retire as early as age 60 to 62, when in reality if they worked just a couple of more years until age 64 to 66, they could meet all of their retirement goals. This is partially due to the fact that they will also receive higher pension or Social Security benefits by waiting to take them at a slightly later age.
As you think about your retirement plans, you should think about a variety of options and outcomes that can set you on a path towards a goal that is attainable for you. Some people may want to save more to retire early, some people may want to balance current lifestyle and saving more, and are more than happy to work an extra year or two to be able to enjoy life along the way. At Impel Wealth Management, we can help you evaluate these choices and put together a plan that allows you to Move Life Forward in a way that makes sense for you and your family.
As you think about your retirement plans, you should think about a variety of options and outcomes that can set you on a path towards a goal that is attainable for you. Some people may want to save more to retire early, some people may want to balance current lifestyle and saving more, and are more than happy to work an extra year or two to be able to enjoy life along the way. At Impel Wealth Management, we can help you evaluate these choices and put together a plan that allows you to Move Life Forward in a way that makes sense for you and your family.