Retirement in America is a very big deal. You start hearing about retiring when you start your first full-time job and are applying for benefits. At this time, most people aren’t concerned about saving their money for the future. Or they are uneducated on why it is important to start as early as possible. What does it mean to retire? Retirement is to withdraw from one’s position or occupation or from active working life (Anspach, 2018). The average age to retire in the United States is 65. Some people are able to retire at the age of 63, but this is considered early retirement. Other individuals work longer, because they need to save more, they feel physically able to, or they just enjoy their job. Unfortunately, without a long-term plan, unless you’re wealthy, then you won’t be able to just randomly stop working as soon as your turn 65. That’s why retirement is talked about as soon as you begin working.
The United States decided in 1935 when it moved to using social insurance, that the retirement age should be 65. At the time, about half of the state pensions systems used age 65 as the retirement age and the other half used the age 70. The year before, Congress passed the Railroad Retirement System which stated retirement was age 65. With those many large entities being age 65, they decided this would be more reasonable than age 70 (Social Security Administration, 2018). In the 1930’s, if you lived to be in your sixties then this was considered a long-life span. Also, people weren’t as healthy, so reaching this age they sometimes weren’t physically able to continue working. Now in 2018, with the large advancements in medical technologies, people tend to live a lot longer and are able to work longer. We are now outliving our later relatives by many years.
Even though the American government has said that the average retirement age is 65, this actually varies by state. Places with a higher cost of living have a higher age, because people have to work longer to be able to afford retirement in their state. States with high unemployment, the average is lower. If they’re unable to find a job, then they might be forced into retirement earlier than planned (Anspach, Average Retirement Age In The United States, 2018). Another factor of people working longer than age 65 is not planning accordingly. Like mentioned earlier, things like this have to be planned and saved for. When starting your first full-time job, retirement is talked about because this is when you should start setting aside money for the future.
When looking into finding a job, it is important to review the benefits offered. Companies that offer a 401(k) plan are great, some employers will even contribute money or match up to a certain percentage that you’re contributing. This is them essentially giving away free money, so it’s something that should definitely be taken advantage of. A traditional 401(k) plan is good, because the money you’re investing is pre-taxed. There is also a Roth 401(k), but the money is taken out of your check after it’s taxed. There are also IRA’s or individual retirement accounts that are sometimes offered through your bank or a third party, these are recommended if your employer doesn’t offer a retirement plan (Bank of America Corporation, 2018).
Retirement is definitely not as stress free as the media portrays, unless you’re very wealthy and were able to contribute a lot of money to a plan. The media likes to highlight moving to warmer climates, living in great communities, and making new friends that are around your age. They fail to mention how much these types of places are to live and how much money should have saved over time. With the economy constantly growing, everything is becoming more expensive. Some of the top stressors for retirement according to USA Today are; financial concerns, health worries, caregiving, relationship issues, and super-charged changes (Hellmich, 2014). Unfortunately, most companies aren’t paying their employees the amounts they should be to be able to live comfortably and also save for their future. There are also capacity problems. Since people are living longer, there is more of a wait on availability for retirement communities or homes. A family friend was eligible to live in a low-income apartment for the elderly, the amount was based upon how much you make. She had to wait a few years before she was able to move in, because there is a higher population of older individuals.
Retirement, Social Security, and Medicare are things that the government need to revisit and find better solutions for. These may have been great options when they first were organized, but since then many things have changed, then they’re not as effective now. Even though the thought of retirement is pushed on everyone, it seems that the information you need to achieve it, isn’t as easy. There should be centers where you can go and make a long-term plan with a person, because some older individuals prefer face-to-face contact, rather than researching over the internet. The 401(k) websites try and help you figure out if you’re on track with your savings, but with the economy constantly getting more expensive, then it’s always changing. The government needs to realize that people are living way longer than they used to and can’t be forgotten.
In conclusion, retirement will always be something that people will look forward to. It is something that takes your entire career to plan and save for. Doing your research and making sure you’re on track every year to retire comfortably should be a priority. When contributing to your 401(k) or IRA, you should be upping your amount by 2% every year that goes by. Reevaluating your situation every year and having an end goal is the best way to stay on track with retirement, it is definitely something you can’t start making decisions on when you’re 64 years old. Staying educated on retirement, keeping your debt low, and saving as much money as you can will only benefit you in the end.
