Retirement becoming out of reach?
Updated On: Oct 15 2013 06:12:03 PM EDT
More than four in five older Americans are expected to keep working during their latter years, a sign that traditional retirement is becoming out of reach.
Among Americans ages 50 and older who currently have jobs, 82 percent expect to work in some form during retirement, according to a poll by the Associated Press.
Sixty-five used to be the age the majority of people left the workplace, but if you look around, you'll notice more and more people older than 65 are still working.
"I was looking for a job and they had a sign on the door, and I live within walking distance, so I decided I would give it a try," said 79-year-old Gilbert House, who works at European Street Cafe. "I love it. Excellent people to work for."
House, who prepares food, was retired for 12 years. He said living off Social Security was a challenge. He now lives comfortably because he has a job again.
"I would have to pay my bills and then hope I had enough to eat on," he said. "Now I can pay my bills and eat and put gas in my car and pay my insurance."
Although House loves working, his advice for younger people is to plan for their future.
"Have a 401k at work, please save on your own, because prices just keep going up, and if you run into an illness it's very expensive," House said.
The AP polled a little more than 1,000 people ages 50 and older. The poll found that four out of five people say they expect to keep working instead of retiring.
The still-sluggish economy, battered 401k retirement plans and inadequate savings are to blame.
Financial planner Joe Krier says people need to start putting away money as early as they can. He said 25 years old is a great time to start.
"Most people don't start seriously saving for retirement until they are 50 or so, and they are way behind the eight ball," Krier said.
He said people can put their money to work now so they won't have to later in life.
"Set a certain percentage of your pay aside, no matter how small, just get in the habit of doing it," he said. "And I would say no less than 5 percent of your pay as a starting point."
Excluding pensions and homes, 39 percent of survey respondents say they have $100,000 or less saved for retirement. Nearly one-quarter have less than $10,000.
Krier said that's not enough to live off of for your golden years. The amount of money you'll need is much higher.
"For most people, it's a half-a-million to $3 million dollars you actually need to be looking at," he said.
Krier said although it sounds like a huge chunk of change, retirees will be spending that for the remaining years of their life. He said it needs to be enough money to get them through a couple of decades comfortably.
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