Robert Powell is the retirement columnist for MarketWatch. He is OK. He sometimes offers some good tips. He has two major problems: (1) hardly anyone reads his column, and (2) of those who do, hardly anyone will take his advice.
That’s because hardly anyone plans seriously for retirement.
How do I know? Because most people retire. Most people find out after five years that they made a serious mistake in retiring. Too late.
If they did the kind of planning for retirement that Powell recommends, the majority of Americans would discover by age 60 that they cannot afford to retire. In 2011, a little over 25% of Americans take the lower “early retirement” option offered by Social Security at age 62. They are unwilling to wait. They think they need the money at age 62.
Anyone who needs government-provided income at age 62 cannot possibly afford to retire at age 66. But most Americans do retire by age 66.
We read stories about a big change today: older Americans are staying in the work force. But when we look at the statistics, we find that almost two-thirds of American men quit at age 65. For women, it’s almost three-quarters. About 90% of the men quit by age 75. Here is a chart that shows this clearly. It is published here.
When thinking about your income, or your long life, think also about the end game. “You’ll need goals in retirement,” said Andrea Bulen, a financial planner with Paula Hogan. “Retirement is not necessarily an end, but a beginning. Set those goals and plan out what you will need to do to achieve them. Is your retirement income sufficient to meet those goals?”
Also, consider how you will change your lifestyle in retirement, not just from a monetary perspective, but what will your day-to-day life feel like? “What would an ideal week in retirement look like?,” Bulen asked. “What will an ideal week in retirement look like for your spouse? Are those weeks compatible?”