Retirement

For What It's Worth

by Alex Hutchins

My father (1917-2002) retired at the age of 62 after working 40 years with the Federal Government to which he contributed no Social Security and received no Social Security retirement monies because he was eligible for a Government Pension Plan.  He also remained in the US Navy Reserves after WWII for another 20 years and when he retired received a pension from them as well.  He was what is called a "double dipper."

As a result of these two pensions, he received an income from the Federal Government until he died that was in excess of what he was being paid by the Federal Government when working for them full time.  In addition to these 2 pensions, my father invested in real estate as well as the stock market from which he received additional monies of a substantial nature as he benefitted from the riding on the top of the financial wave that started in the 1960's.

At 64, almost 65 (Oct), I am still not retired even though I too, like my father could have retired but the income from Social Security for me would not pay half of my less than average cost of living.  I will no doubt not even be in a financial position to retire at age 66 and will more than likely continue working until I am 70, at which time my wife will be 65 and we both can draw on medicare and medicaid.

I did not work for any organization long enough to get a pension, although I could have if I had not elected to remain in an "employee at will" State.  I also did not ride the crest of a financial wave, although I tried but, like most everyone else, lost 2/3 of my investment due to the robber barons on Wall Street.  My share of my medical expenses for 2011 were over $19,000 which would have eaten up all of my social security at 62 and most of my social security at 66.

Earlier this month, MSN reported the following:

Robert Benmosche, the chairman of the insurance giant American International Group, said an increase in the retirement age was unavoidable. What surprised many is how high he predicted the age would go.  "Retirement ages will have to move to 70, 80 years old."

Currently, Americans are eligible for early retirement at 62, and full retirement at 66. The loss of retirement funds during the economic downturn forced many to acknowledge that they would have to work longer. 

Will people really have to work a decade or more longer than they expected to make ends meet in retirement?

The answer is yes, according to some retirement experts. A number of factors, accelerated by the Great Recession, are now forcing people to change the ways they save for and think about retirement.

"Most people didn't have enough retirement savings before the downturn. The downturn was the two-by-four hit over the head that made them realize this result," says Steve Vernon, the president of Rest-of-Life Communications, a company that helps people adjust the way they save for their post-work years.

So, get ready baby boomers, most of us are going to have to work until age 70 but the good news, if it is good news, is that our children will need to work until they are 80.

That is unless you start planning early...