Older, worried and working?

June 15, 2017

Author: Dave Gardner

 

More older Americans are working than ever. The Bureau of Labor Statistics predicts that the greatest employment growth will be among those 75 and older over the next ten years, closely followed by those aged 65 to 74. If you fall in this older worker category, why are you still working?

For most older workers, the reasons may be primarily financial. Social Security has steadily increased its full retirement age to 67. We’re witnessing the slow death of traditional defined benefit pensions that pay a steady income. We also are enjoying a longer life expectancy than ever before, especially in fit Boulder County, so our money must last longer.

However, there are many of you who continue to work with no financial need to do so. We also see many reluctant retirees who may hyper focus on their finances, when there is little reason. If you fall into the category of worried and working yet with financial means, consider these possible explanations.

Where does the cash flow come from? We have covered in this column how to build a “retirement paycheck,” which is a key success strategy for retirees. Most retirees don’t have a pension and must build the check on their own or with the help of a financial adviser. Our firm has seen many approaches: holding ten years of projected spending in a checking account (your bank loves you!), buying expensive annuities with guarantees, building fixed income ladders, and praying for the best.

Whatever your approach is, make sure it’s financially sustainable and one that frees you from financial worry. What good is a retirement strategy if it requires you to obsess over your investment balances every day? In my experience that obsession will generally undermine your financial security in the midst of the market decline. An overdeveloped fixation on your finances may provoke the “big mistake,” a harmful financial reflex once we experience stomach-churning stress of a market decline.

Hard to relax the “saving muscle.” This century so far has been relatively cruel to investors. We have seen two historic bear markets: the Tech Bubble starting in 2000 and the Great Recession of 2008 – both the worst since the Great Depression. But you endured and continued to save. Flexing that “saving muscle” gave you financial confidence.

At some level you may know your financial confidence depends on saving a good percentage of a steady income. An informed and reasonable retirement plan can ease this transition from flexing your saving muscle to using your savings in sustainable ways.

Position and relevance in society. In contrast to those with financial concerns, your worry may be due your place in the world. Most of us take pride in our work, and can attribute our self-worth at least in part to our career. Those who have titles associated with their work, whether it’s “doctor” and “dentist” or “professor” for academics, can face the biggest challenges imagining a successful retirement. Coming up with way to continue to contribute to others could be your key to transitioning to retirement.

How to spend your time. While you are working full-time, you have mornings and afternoons occupied five days a week. Just what will you do with that time in retirement? What will get you out of bed every day? While to some degree you only understand how you’ll respond to retirement once you’re there, thinking about it now can ease the stress you didn’t know you had about your next chapter.

It may be the answer to some of these questions is that you continue to work part-time, if that’s an option for you. It can ease financial concerns and address questions about your schedule and relevance in society. Regardless of the choices you make, look hard at why you continue to work. You don’t want to be worried and working just because you don’t have a plan.

About Dave Gardner

David Gardner is a certified financial planner with a practice in Boulder County and can be reached at dave@confluencefa.com and at twitter.com/Dave_CFP.