Retirement may just be a dream for much of the population but there’s another reason you shouldn’t count on retirement
A recent survey of millennials by asset manager Blackrock found that, on average, the group expects to be fully retired at 62 years old and live to nearly 80 years.
Life expectancy for millennials is actually around 84 years so not too far off expectations but they may be sorely mistaken on when they will be able to retire.
Changes to social security and working off survival rates by age, more than one in five will never live to retirement and about half will be able to enjoy a meager ten years of their retirement plans.
But there’s a more important reason you shouldn’t count on retirement. One that means changes to your lifestyle today and the potential to be much happier.
Why You Might Not Retire Anyway
While anyone born after 1960 can start collecting full social security benefits at 67 years, millennials and even some in the Gen X group may see drastic cuts to their benefits.
Full benefits at 67 are about 80% of what you now receive if you wait to retire at 70 years old. The way things are going with the social security fund, the point for full retirement is likely to be increased to 70 before too long. That would mean benefits at 70 would be 80% of the max amount you could collect at 73 years of age.
With more than a third (36%) of retirees relying on social security for 90% of their income, the odds are high that you’ll need to wait until 73 years old to collect enough to live on.
Ok, so millennials will need to push retirement back a little but that’s no reason to not count on retirement at all, right?
What if you also had a one-in-three chance of not making it that long?
Working off of the actuarial life table on the Social Security website, about a third of the people in any given birth year won’t make it to 75 years old. By the time you reach 82 years old, half of the people you were born with have already shuffled off this mortal coil.
I won’t go so far as to call social security the biggest pyramid scheme in history but…yeah, paying into a program so current beneficiaries can cash out and you only have a percentage likelihood of ever collecting benefits?
A Bigger Reason You Shouldn’t Count on Retirement
It’s a pretty morbid idea, sorry, but there is a silver lining to all of it. Many people slave away each day at a job they hate on the hope of a better life in retirement. They work multiple jobs and save every penny for those white sand beaches after they’ve told their boss to shove it.
I’m all for investing and building a nest egg, but who wants to be miserable for half of their life just on the chance they might be a little happier 30 years from now?
Even if you do retire at 67 and live to be 84 years old, you’ve spent the last 45 years working your fingers to the bone for 17 years of relaxation. The math just doesn’t add up.
The Alternative to Relying on Retirement
If you’ve read this far then maybe you already know the alternative to counting on retirement. I’ve been working from home full-time for three years now. I work harder than I ever did for a traditional employer but am happier than I’ve ever been.
It’s because I’m working for a passion, not for a paycheck. I enjoy what I do. I get paid to do it and am able to save money for emergencies and dream expenses but I really don’t need to count on retirement because I don’t want to retire!
The beauty of many of the work from home strategies is that you don’t have to go all-in, full-time. Any one of the side hustle ideas we cover on the blog can be managed in as little as five hours a week. Eventually, your side hustle job may turn into a full-time career and you may no longer even care about retirement.
The first step is to check out some of the work from home ideas on the blog. From freelancing to starting a blog, some will pay more now while others take longer to get going but may pay out over the long-run.
When you start being happy with what makes you money, you stop looking forward to retirement. You won’t have to count on retirement if you don’t want to retire. It’s an odd change from the norm where we are raised to plan so diligently for our ‘golden years’ but it can be one of the best decisions of your life.