Are You Unprepared for Retirement?

But baby boomers aren’t the only generation who aren’t prepared to give up their paychecks. In a July 2023 poll conducted by Axios and Ipsos, 29% of workers under 55 admitted that retirement may not be in the cards for them. And the reason is clearly financial. In a 2023 Credit Karma survey, 25% of Gen X participants reported that they had a zero balance in their retirement accounts.

If you’re part of this burgeoning group that must embrace “non-retirement,” there are a few things you should keep in mind as you continue working that 9-5.

What to know if you are unprepared for retirement

Ageism

While an amendment to the federal Age Discrimination in Employment Act (ADEA) abolished the mandatory retirement age in 1986 (with some exceptions for jobs with high physical fitness levels), some workers may still have trouble holding onto employment as they get older.

Companies will often offer older, high-earning employees an early retirement package to thin the herd. Although early retirement must be completely voluntary, companies can sweeten the deal with attractive incentives to make it too good to pass up. Another way that that employers can push senior staff out the door is through a wider downsizing. Your employer could also transfer you to a different department or location or change your role altogether, which could make hanging in there much more challenging.

When you’ve been in a position for years, or even decades, it’s easy to take your foot off the gas and just coast. But it’s important to keep proving your value to your employers. Take the initiative to stay current on technology and industry trends, sign up for courses to upgrade your skills, join professional associations and even volunteer for projects that may be out of your realm of responsibility. Showing that you’re invested in your position goes a long way in ensuring your job security.

Physical demands

Some jobs, such as construction and warehouse work, home healthcare and physical therapy, may simply become too hard on your body as you age.

“We haven’t had enough advances in making jobs more accommodating for a workforce that’s aging,” says Siavash Radpour, associate director of the ReLab. “The solution is to invest more in technology to make workers more productive and reduce the physical demands of jobs, but that hasn’t happened.”

Until companies make these adjustments, older employees working in labor-intensive jobs may need to transition to less physically demanding roles. This may be an opportunity to try something new and reinvent yourself!

To acquire the skills needed to switch jobs or careers, look into continuing education classes at your local college or university or find an online program to expand your skill set. One such online resource is AARP Skills Builder for Work, which includes courses such as Microsoft Office Fundamentals, Mastering Today’s Remote Work, and Small Business Fundamentals.

Social Security benefits

Continuing to draw a paycheck allows your retirement investments to continue to grow. Moreover, having this income gives you the opportunity to delay collecting your Social Security benefits to full retirement age or up to age 70, which will increase your monthly benefit.

However, if you do begin collecting Social Security while you’re still working – and you haven’t yet reached your full retirement age – you will forfeit some of your monthly benefit if you make over the annual limit set by the Social Security Administration. But you won’t be penalized forever. Once you hit your full retirement age, Social Security will begin giving you credit for the months that you lost benefits. Click here for details.

Related: When to start Social Security

Friendships

But the sacrifices you make may extend further than your pocketbook. As you watch your friends rest on their laurels (and their couches) while you work, you may envy their freedom. Conversely, they may be envious of how you still have a sense of purpose in your life.

Because of this mutual disconnect (and the fact that you can’t meet them for coffee at 10 a.m.), some friendships may fall by the wayside. However, with other friendships, these differences will enrich the relationship and help it to flourish.

The flip side of being unprepared for retirement

The dictionary definition of “retire” is “to withdraw, or go away or apart, to a place of privacy, shelter, or seclusion.” But when you continue to work – even on a part-time basis – you’re able to interact with people of different ages and backgrounds, feel a part of something and remain plugged into life.

You’ll probably find many other hidden benefits of non-retirement along the way.