Working after retirement age

When I started my faculty position at the age of 32, the university had a defined benefit plan. They would contribute 6% of my salary to my retirement investment, pre-tax. I could contribute up to 60% from my salary pre-tax, but to get the university contribution, I had to contribute at least 4%. Such a deal! And yet I knew of people who refused to make the minimum withholding and so didn’t get the free money from the university. Eventually, the university raised its contribution to 10%, and I maxed out my contribution at 10%. The government gets its share as we start taking payments, and soon we’ll have to take mandatory minimum distributions, to make sure it does.

The best way to save for retirement is to start as young as possible. Small amounts of monthly savings over 35-40 year and invested with compound interest is way easier than waiting until age 50 or later to begin. But not everyone can do that. For most retiring Americans, Social Security is most or all their retirement income. For most American homeowners, their house is most of their personal wealth. So, the response is to plan to continue working after retirement age.

“This presents a dilemma. On paper, working longer boosts retirement income — and in many cases, it's a rational choice.

But [economist Teresa] Ghilarducci warned that "most of us don't even have a choice to work longer, even if we don't have enough money to live on in our old age."

*snip*

"The working longer consensus was really a convenient untruth," Ghilarducci said in a recent episode of the Decoding Retirement podcast. "The consensus was that ... if people haven't saved for the last 40 years ... when we told them to, at least they have an out and we don't have to do anything about it."

*snip*

"Working actually isn't that good for you," she said, adding that oftentimes, the benefits of working longer depend on whether an individual is "part of the elite."

"For the privileged few, work might make them healthier and keep their minds sharp, especially if they control the pace and content of their jobs, Ghilarducci said. But only about 11% of workers have that kind of autonomy.

"The rest, 89% of people, have jobs that if they continue them would actually hasten death by causing more anxiety and cortisol [a stress response] because work and commutes, especially if you aren't the boss, can create higher levels of cortisol."

So what is to be done?

"The government becomes your most important financial partner as you age," she said.

"According to Ghilarducci, instead of relying on individuals, the government needs to take a bold new approach: a "Gray New Deal."

"She explained that, just as FDR's New Deal addressed the needs of workers and the unemployed, today's policies must support a large and growing population of older adults — many of whom are being pushed out of the workforce or retiring without enough savings."

Not anymore. The Republican party is in control of all three branches of the federal government and is assiduously pursuing the shredding of the social safety net. Even if you’re not on Medicaid, those cuts will affect hospital access. And make no mistake: the GOP coming for your Medicare and Social Security. Vote accordingly, peeps.

https://finance.yahoo.com/news/working-longer-wont-save-your-retirement-expert-warns-160048953.html

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