Once upon a time, retirement was a feasible part of the American dream. People saved up for retirement, had Social Security as a guaranteed income for their future, and much more. Today, however, retirement looks more like a pipe dream than something to aspire to. Social Security is expected to be depleted by 2035. Nearly half of Americans don’t have a retirement fund. The cost of living is rising, and many people are in positions of financial uncertainty, all of which make the possibility of retirement seem unlikely.
The question then remains: what will the future of retirement look like, and how do we prepare for it?
Retirement Trends to Expect
- Women: To take a step away from grimness for a moment, it’s likely that we’ll see many more women prepping for retirement in the future thanks to the increase of women joining the workforce today. This increases their lifetime earnings, improving Social Security benefits and retirement plan savings rates, and leads to more equal retirement savings across the board.
- Social Security: As mentioned, Social Security is facing something of a financial crisis. This means that people could not get their full benefits from the program, which threatens the futures of people who planned around these benefits.
- Working Longer: Seniors are usually seen as being retired by 65 at minimum if they weren’t lucky enough to retire earlier. This, however, is no longer the case, as the AARP found that adults 65 and over are twice as likely to continue working past retirement age than they were 35 years ago.
How to Prepare
- Start Saving: Though a supposedly obvious solution, many Americans aren’t saving for retirement. It’s never too early to start, though, and you can do so by putting money into a 401k, IRA, or your own savings account.
- Plan For Retirement: Don’t retire without a plan. Before you think about retiring, calculate how much money you’ll need to maintain your lifestyle once you stop working—this includes rent or mortgage, food, travel, and so on. Also, take medical bills into consideration, as seniors are at a higher risk of medical issues than younger people.
- Pay Off Debt: Making sure all of your debt is paid off before you retire will not only mean one less bill to worry about once you’re done working, but it’ll also mean you have more money to do what you want to do during your retirement years, not what you need to pay. While you’re working, pay off all of your debts and extra fees.