If you have not yet considered eventual retirement as a part of your overall career management, I encourage you to start now. We all know that the economy and job market have become seriously more challenging over the past several years. What you might not have thought enough about is whether you need to revamp your career management planning in light of the need to cover your retirement years.
While I tend to be an optimist and take a positive approach to challenging circumstances–and I personally do not expect to retire any time soon–I also like to stay aware of what is happening or might be happening that could affect me when I reach that point. To that end, I read occasional articles and other advice pieces on the subject of retirement preparation and calculation of financial needs to cover that period. An article published in October 2012 (just a few months ago) was the latest to catch my attention.
Authors Rich and Fry note in their article, More Americans Worry About Financing Retirement, that “Despite a slowly improving economy and a three-year-old stock market rebound, Americans today are more worried about their retirement finances than they were at the end of the Great Recession in 2009, according to a nationally representative survey of 2,508 adults conducted by the Pew Research Center. About four-in-ten adults (38%) say they are ‘not too’ or ‘not at all’ confident that they will have enough income and assets for their retirement, up from 25% in a Pew Research survey conducted in…2009.”
If you do the math, that means there are still 60% of Americans who feel confident they’ll have enough money to cover their retirement. However, if you’re among the 40% who don’t, that might not make you feel a lot better. Regardless of which group you fall into, though, it’s a good idea–maybe even a great one–to start now in doing serious thinking and planning to address your personal situation.
As important as anything else is the need to keep this subject in mind when you’re looking for a new job, negotiating your salary or taking any other action that could have an impact on your long-term income prospects.
As the Pew Research article notes, the age at which we feel most concerned about our retirement income has dropped noticeably over the past 3 years. “In 2009 it was ‘Gloomy Boomers’ in their mid-50s who were the most worried that they would outlive their retirement nest eggs. Today, retirement worries peak among adults in their late 30s—many of whom are the older sons and daughters of the Baby Boom generation….This is also the age group that has suffered the steepest losses in household wealth in recent years.”
Worrying alone isn’t the answer, of course. However, thinking you don’t need to consider retirement plans until you’re, say, 5 or 10 years from retirement age, could land you in trouble a lot sooner than you expect. For example, Social Security payments depend heavily on your most recent years of earnings. If you don’t do your best to maximize your income in earlier years, you might not have enough time to catch up. (For the moment, I’m ignoring the arguments about how long Social Security will be around, etc.)
It’s important to remember, too, that future raises from your present employer are based on a percentage of your current income. If you have or can find any negotiating leverage to boost those a bit, it could pay off more than you think later on and help strengthen the financial aspects of your retirement outlook.