My 64-year-old accountant husband has spent our entire Florida vacation this year staring at spreadsheets and IRS rules, calculating retirement account scenarios. He's considering taking the retirement plunge, and even after more than 25 years of managing other people's money, he's nervous about having to depend on his skills to pay our bills. Living without a bi-weekly paycheck is scary, no matter who you are.
It doesn't help any that the economy is punishing us baby boomers, making all of us -- rich and poor -- nervous about our retirement planning.
A survey of financial planners who are members of the American Institute of Certified Public Accountants found that 79 percent had clients who were delaying retirement because they could no longer afford it. About one-third said their clients were working one to three more years; 39 percent said four to six more years; and about 14 percent said they had clients who planned to stay on the job more than seven additional years. Ouch.
If it is any comfort, these CPAs, whose clients have between $500,000 and $5 million in savings, also boasted that their customers survived the financial downturn relatively unscathed. About 44 percent said their average client emerged from the recession with increased net worth, and 17 percent saw their net worth stay the same.
Meanwhile, the Employee Benefit Research Institute, a think tank funded by financial services companies, reported that the percentage of people age 55 and older who are still working is at its highest level in 35 years. The study found that 34.6 percent of people 55 and older worked in in 1975. By 1993, only 29.4 percent were on the job. Since then, the overall labor-force participation rate has steadily increased, reaching 40.2 percent in 2010.
For better or worse, our retirements are unlikely to look much like our parents'. We have to keep working and saving, two realities that aren't all bad. Rocking on the porch is overrated.