Offbeat America's backup retirement plan: Keep working

18:05  17 may  2018
18:05  17 may  2018 Source:   cbsnews.com

This is the nation's biggest retirement worry

  This is the nation's biggest retirement worry Americans are scared stiff about one retirement expense. Unfortunately, few take advantage of a great way to calm such concerns.Future medical expenses haunt the imaginations of millions of Americans. In fact, paying for health care costs during one’s golden years is Americans’ No. 1 retirement worry, according to Franklin Templeton Investments.

America ' s backup retirement plan is, well, work . Notably, Americans have long harbored the notion that they were going to work well into retirement age, according to an annual survey by the Employee Benefit Research Institute.

Most people assume they will just keep working if their retirement savings fall short. Want a professional opinion of your backup plan ? Enroll in Schwab Intelligent Advisory® and talk with a CERTIFIED FINANCIAL PLANNER ™ professional.

America's backup retirement plan is, well, work.

More than one in three American workers are using the gig economy to find full- or part-time work, and for roughly one-third of that group, the side gig is specifically aimed at increasing their retirement savings, according to a new study by financial advisory firm Betterment.

Perhaps not surprisingly, the older the worker, the more likely the side gig is aimed at building that retirement nest egg. Just 42 percent of those under the age of 35 said they were taking side gigs to save for retirement, while 76 percent of those who were 55 or older cited retirement savings as their primary motivation.

Prepare now for retirement health care costs

  Prepare now for retirement health care costs Medicare alone won't pay all the medical bills you're sure to incur, and early retirement makes it even trickierSo you're largely on your own when it comes to making sure you're adequately covered -- and you can afford that coverage.

The Northwestern Mutual study found that 55% of Americans plan to work past the age of 65 out of necessity, with the majority citing "not "With affordable, automated investment options for full-time workers and giggers alike, we look forward to partnering with workers on this new path to retirement ."

The evidence backs this up : According to the 2016 Retirement Confidence Survey conducted by the Employee Benefit Research Institute, 46 percent of retirees left the workforce earlier than If working longer is part of your retirement plan , you’ll want to investigate the options at your current employer.

A significant number of side hustlers don't expect to stop working when they hit retirement age, either. Between one-fifth and one-sixth of those who have taken on second jobs said they'd keep the side gig after normal retirement age, figuring that it would serve as their primary form of income.

Why are so many Americans having to work side jobs to catch up on retirement savings? Largely because they were too indebted to make saving a priority, according to the survey. A whopping 72 percent of those who picked up side hustles in addition to a regular full-time job said they were doing it to pay off debt. Of this group, 16 percent held more than $50,000 in debt on credit cards and student loans.

The survey results come as no surprise to Richard Eisenberg, managing editor of Next Avenue, a news site geared for readers who are age 50 and over.

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While some retirement -eligible workers continue at their same position, others find a new retirement plan and venture in their senior years. Readers, is your new retirement plan to keep working ? Are you going to look for a more flexible second act? Share with us below!

America ' s back - up retirement plan : work . Here's troubling news for America ' s senior citizens. A recent international survey found that adults age 65-plus in the US are sicker than their counterparts in 10 other high-income nations, and they face greater financial challenges regarding their health care.

"Side hustles are becoming a way for people to fund retirement because they let people earn money based on what they can do and what they like to do," he said. "For some people, that's easier than saving."

Discomfort with investing may also play into the trend, Eisenberg added. With fixed-income investments offering such low returns, retirees have had to invest in stocks. But having lived through multiple market reversals, this demographic is better aware than most that nothing about stock returns is guaranteed. Working, on the other hand, is a sure thing.

Notably, Americans have long harbored the notion that they were going to work well into retirement age, according to an annual survey by the Employee Benefit Research Institute. However, these expectations largely prove false. Back in 1998, about 56 percent of workers said they expected to work in retirement, but only 22 percent of retirees were actually working. Today, 68 percent expect to work in retirement, but just 26 percent are receiving pay for work after they've retired, according to EBRI.

"We are not seeing a giant trend of people in their 50s and 60s rushing to drive for Uber or take some other gig," says Eisenberg. "The numbers are still fairly small. But they're growing and they are likely to keep growing."

The 1 Retirement Expense We're Still Not Preparing For .
Are you guilty of neglecting it as well?In a recent study of retirees 85 and older, most respondents who have not yet needed long-term care expect that if they do, they'll get by with the help of paid home aides and family support. Most of those who are currently getting long-term care, however, have had no choice but to pack up and move to nursing homes or assisted living facilities, thus significantly adding to their costs.

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