Throughout the 1970s, the average age of retirement was just under 65. Today, one out of every five Americans over the age of 65 are still working. Even more alarming is the fact that the individuals who have already retired are the ones hurting the most. Most assume that retiring earlier is a sign of accomplishment, but in many cases, those that retire early are the ones that need to keep working. Many were forced into retirement due to poor health and being unable to perform more physically demanding jobs, the kind that are most often performed by individuals without a college degree. In fact, men with college degrees are retiring an average of almost three years after men with only a high school degree. This is a large change considering the two groups were retiring only a few months apart during the 1970s.
Saving Less for Retirement Trending
Americans are also saving less for retirement than in the past. In fact, a study by Northwestern Mutual found that almost a third of Americans have less than $5,000 in their retirement savings. A frightening figure when the generally recommended amount to save for retirement is $1 million. And even that number has come under scrutiny lately. Inflation, lack of pensions, and a longer life expectancy are leading many experts to recommend even more than $1 million nest egg to enjoy retirement.
Retiring Early May Mean Less Benefits
Those that retire early will also receive less in Social Security benefits, with some getting up to 25% less depending on what age they opt to start payments. For instance, if an individual elects to receive Social Security benefits at age 62, and the monthly payments are $750, that same individual would have received $1000 a month if they had waited until the age of 66. That number could increase even further if an individual waits until 70, when the monthly benefit would be approximately $1300. A retiree’s monthly benefit could almost double if they were able to hold off on claiming their Social Security benefits. Unfortunately, many recently retired Americans can not afford to forego those benefits for that length of time, if at all.
Contact a Trusted Retirement-Focused Bankruptcy Attorney Today
Retiring earlier, lack of savings, and receiving less Social Security benefits leads to massive financial problems later in life when most assume they will be relaxing and enjoying their freedom from a 9 to 5 job. If you are having financial difficulties due to early retirement or have concerns about being able to set aside enough for retirement, please give one of our Bond & Botes offices a call for a free consultation.
Grafton Weinacker is an Associate Attorney at the Bond & Botes Law Offices in Birmingham, Alabama. He holds a Bachelor of Science from Birmingham-Southern College, and a Juris Doctorate from Cumberland School of Law at Samford University. He joined the Bond & Botes team of bankruptcy attorneys in July of 2018. Read his full bio here.