The Center for Retirement Research at Boston College has released a new brief indicating that more than a third of older workers retire earlier than planned. But, are you really ready?
The study, “Retiring Earlier Than Planned: What Matters Most?, “further suggests that while health shocks and job loss are expected as key factors in upping the retirement date, those issues only make up a quarter of the reasons why people tend to retire early.
The report states that health plays the largest role in early retirement, “both because people in bad health overestimate how long they can work and because people in bad initial health overestimate how long they can work and because health often worsens before the age at which they planned to retire.”
Job loss is another increasing factor with those losing a job later in life less likely to find a new job. And for those that do find a new job, research indicates that the effect seems to be “discouragement and ultimately an early retirement.”
At any rate, it’s never too early or too late to start planning for your future. If this research is any indication, taking the steps necessary to save money today, can make your financial future more comfortable.
Try a couple of these steps:
Pay yourself first and make an effort to set a savings goal for each pay period and have that money deposited directly into your retirement account—even if the amount you save is only $20 or $40 each pay period. Without even thinking about it, the funds get automatically deposited into your retirement account, building security for your retirement years.
Try limiting your debt now. Long-range savings goals are easier to attain if you don’t have debt piling up at the same time. The more money spent on debt payments means less money for necessary expenses and savings. Save for the purchases you want instead of using credit cards and racking up high interest charges. Use credit cards only in emergency situations unless you pay off the balance every month.
Participate in your employer’s 401(k) or 403 (b) plan. Funds are taken out pre-tax, and if your employer matches contributions, that’s free money for you or you are just leaving money on the table if your don’t participate.
For more retirement savings tips, click here.