Why Are Older Americans Returning To Work?
More Americans aged 65+ are not retiring and rejoining the workforce. Many Americans believe they will retire broke, and retirement has become a myth.
Many older Americans are returning to work in their 60s and 70s. At the same time, many Americans are not optimistic about their retirement prospects. This results from a combination of issues such as not saving properly, retirement being shown to be a myth to many, not properly preparing for retirement, and a lack of financial education.
Retirees Are Having Problems
Retirees are experiencing problems due to the rising cost of living and inflation. They could retire with enough money in a savings account, 401K, or other investments. The retirement dream is fading as many return to work in their mid to late 60s.
According to CBS News, “40% of retirees [said] Social Security is their only source of income.” The U.S. Bureau of Labor Statistics has found that nearly a quarter (20%) of adults over 65 are returning to the workforce. They do not have a choice. They cannot make ends meet with how they had planned to retire.
They must now find a way to supplement their retirement income, savings, or social security. For about 20% of retirees in 2023, that means they must return to work.
Many retirees made the mistake of depending upon one income stream, which they had no control over Social Security.
Problem With Depending On One Income Stream
There is a concept in cybersecurity known as the single point of failure. The same problem is seen in retirement, with many retirees depending upon one source of income. If or when something happens to your income source, you must find a new way to maintain your standard of living. Nearly 40% of American retirees depend solely on Social Security.
They are dependent upon nothing happening to their one income source. If a problem arises related to their income source, they must find a way to make ends meet.
Some retirees may have savings and a 401k to supplement their income. Savings accounts depend on interest rates to make enough interest to make it worth keeping money there. The 401k that many Americans put their money into has its problems. Even the inventor of the 401k said he created a “monster.”
This is why you want to find ways to create multiple passive income streams if you can. You will be diversifying into different sources of income and not become reliant on an income source. You will be protecting yourself again, the single point of failure.
Problems With The Retirement Concept
There are some problems with the retirement concept. First, it makes people believe they must stop working at a certain age. This makes people think that work only means amassing enough money to enjoy retirement. Second, the charts and graphs used to project how much someone needs to make to retire often use low-inflation numbers to massage the numbers. This makes whatever chart you are looking at appear better than it is. Third, once you retire and no longer work, you no longer produce and contribute to the economy. If you only depend on a program like Social Security for retirement, you depend upon others (taxpayers) to support your retirement. They paid a portion of each paycheck to “fund” Social Security for when they retired since that was how the program was marketed to people. This mindset removes the belief that you should plan for retirement by finding ways to save, invest, and increase your income. It makes you dependent that the program that the government program must be there for when you retire because you paid into it. Never mind that the math does not work out for Social Security. Yet for 40% of retirees, that is their primary income source.
Finally, since you are no longer producing by working to bring in an income, you have made yourself dependent on the amount you may have set aside in savings and other investments. They must last until you die. You assume that the prices of products, services, and other things remain constant to cover your costs. You could also live longer or shorter than the amount of time that you have set money aside for.
Many retirees find that they did not adequately plan for retirement or were sold a lie by society and their financial advisors.
The age of retirement was arbitrarily set. The age being near or around 70 traces back to Chancellor Otto von Bismarck. Chancellor Otto von Bismarck worked to create a retirement system where people 70 and older would be taken care of the aging population. The average life expectancy of people was shorter than today, but the concept of retirement can be traced back to Germany. President Roosevelt signed into law the Social Security Act in 1935.
The problem is that many countries are discussing raising their retirement age in an attempt to preserve their pensions and government programs equivalent to Social Security. This has created protests when the math does not work to sustain the programs economically. The biggest problem is that many people want to count on one form of income from the government for retirement instead of finding ways to fund their retirement.
Even the Social Security Administration has stated that Social Security will be insolvent by 2035. Numbers are numbers. Math is math. Debt is debt. The only option would be for the Federal Reserve to print money to cover the government’s programs' costs, worsening inflation.
Best Years Working Rather Than Living
You may end up spending the years of your life working at a job(s) you hate rather than living. By doing this, you have bought into the lie that people are told from childhood and then further brainwashed through the education system.
Many spend the best years of their life working rather than living. A person needs to make enough to live and cover all the living costs, but after that is covered, one can begin to save and invest.
After retiring, many people return to a hobby they once enjoyed or start another hobby since they have time again. They spent the best years of their lives working long hours. Now they can take up a hobby they have always wanted to try things they could not do. For many, that may mean traveling.
Retirees may decide to travel. They may travel to see countries they have always wanted to visit but never had time to while working full-time. They may decide to travel across their home country. They may choose to travel and spend more time with family.
They may spend more time with family. After they retire, they may travel to visit family or enjoy family gatherings more. They have more free time to spend with loved ones since they do not have to work.
The best thing anyone can do is do what they are passionate about and do it for as long as they are healthy and can function. If you can, you can continue to make money while doing what you love and still spend time with family or doing things you enjoy. Retirement is a flawed concept.
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Summary
Americans who are sixty-five and older are returning to the workforce. Even the Social Security Administration estimates that it will be unable to keep the program solvent by 2035. This shows a problem with the retirement concept; at the very least, it does not work for everyone.
For those younger people who want to retire. There are better options than relying upon programs like Social Security and other programs that may not exist by the time you reach “retirement age.” You can do unconventional things that mainstream society looks down upon to take control of your financial future.
Become a secure single.
Thank you for sharing.