How to Avoid Delaying Retirement
Lately, retirement savers have become increasingly anxious about having enough income to last them their lifetime once they’ve retired. It's a valid concern, for three reasons:
From a retirement planning perspective, today's longer life expectancies and inflation—including the ever-rising cost of health care—mean that your assets will have to last longer. Consequently, many individuals today are actually considering delaying retirement.3 This may be a viable option for those who wish to slow the pace at which they'll deplete their retirement savings—but with the proper planning, delaying retirement doesn't have to be something you’ll need to do.
Make the Right Move Today: Increase Your Contributions
One of the smartest moves you can make to help yourself avoid having to delay retirement is to increase the amount you contribute to your retirement plan. And it doesn’t have to drastically impact your budget. In fact, some retirement savers find it easy and convenient to make small contribution increases at the same time every year—such as when their birthday or their annual performance review rolls around.
The Advantages of Delaying Retirement
If you should find that, despite your best efforts, delaying retirement is your only option, there are some advantages to this choice, including:
As You Approach Retirement…
It’s a good idea to carefully estimate how much money you will need in the way of retirement income—and for how long. You may also wish to visit Develop a Tax-Smart Withdrawal Plan, which offers some helpful ideas on how to devise a withdrawal strategy for your retirement income.
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The bottom line is this: Delaying your retirement may be a necessity for some, but with the right planning today, you can give yourself more choices concerning your target retirement age—while helping to ensure that you’ll have a more financially secure retirement.
*Many of Prudential Retirement’s Personal Retirement Services Retirement Counselors carry the distinct designation of Certified Retirement Consultants, an advanced certification available through the International Foundation for Retirement Education (InFRE). Certification includes mastery of retirement plan design, investment strategy, retirement income management, and retirement readiness and counseling.
1 Source: SocialSecurityOnline, Press Office Fact Sheet, Social Security Basic Facts, July 25, 2011.
2 Source: 2011 Employee Benefit Research Institute ”Retirement Confidence Survey.”
3 In the 2011 Employee Benefit Research Institute survey, 36% of respondents indicated that they expect to retire after age 65—up from 16% in 2001.
4 Applies only to those investment earnings related to contributions you made to your account on a before-tax basis.
5 Applies only to those contributions made on a before-tax basis.