retirement challenge

How Retirement is Becoming More Challenging for Older Employees

Over the past few years, it has become more challenging than ever before for employees over the age of 55 to secure positions that are within their normal pay ranges – regardless of how experienced or qualified they may be. Some of the most common remarks these individuals hear include the fact that they are overqualified for the position being applied for or that businesses cannot afford to pay them the wages they are used to earning. 

Forced to Accept Smaller Paychecks

The sad reality is that older employees are usually among the first to be laid off from the very companies where they have invested many years of their working careers. When they are searching for a new job, it often takes several months or even a year or two before they’re able to find any company that will be willing to employ them – but in the meantime, bills still need to be paid regularly. 

Skipped mortgage payments, overdue utility bills and depleted retirement savings cause a number of these experienced and often highly qualified employees to grab at any position that comes available – just so they can continue providing for their families. 

By the time they’ve reached 55, several employees have not only become accustomed to a specific lifestyle; many people forget that these individuals often still have children living at home as well. 

More Older Employees Now than Ever Before

More individuals than ever before that are over 55 are employed these days, and the average jobless rate for them is just over 3% in comparison to almost 4% of the rest of the working population. However, upon finding themselves suddenly jobless, older workers end up remaining unemployed for longer than their younger counterparts. 

Upon reaching 60 and older, employees also have to deal with steadily declining wages – and pay rates continue declining regardless of the amount of experience or education these valuable employees have. 

Why Individuals are Working Longer

People are living a lot longer and staying healthier than ever before, and the rate of standard pension plans is also phasing out quickly. This means that there is less chance of them receiving guaranteed income when the time comes for them to retire – resulting in many older persons wanting to continue working for as long as possible. 

This could fill the large gap in the economy in that the continual labor shortage could be virtually eliminated by hiring older employees. However, not many companies seem willing to hire these valuable employees because they tend to think that productivity rates will decrease when they reach a certain age. However, this is not always the case – there have been many instances where older employees have far outperformed those that are even half their age. 

Employers often forget that older workers possess extensive experience and this can prove to be extremely valuable in a number of situations – especially when younger employees simply don’t possess the knowledge or experience to resolve a specific issue. 

If you would like to find out how you can do everything possible to provide a livable income during your retirement, get in touch with us today.

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retirement income

Convert your Retirement Funds to Workable Income

Although virtually everyone is aware of how important it is to save money towards your retirement years, very few individuals know where to start, how much they will need to save each month and how to ensure that what they are saving will be enough to let them enjoy their golden years without worrying about finances any more than what’s totally necessary. 

Pensions – No Longer as Popular as Before

In years gone by, many individuals relied almost entirely on pension schemes to see them through after retiring. If you were fortunate enough to land a decent job, remained in the same position for 20 to 30 years and then retired from that company, you would have been able to enjoy receiving monthly pension payments that were usually sufficient to cover virtually all of your living expenses. 

Good pension plans allowed employees to invest small sums of money into Certificates of Deposit (CDs) and bonds so that they could even enjoy a few extra luxuries as well. 

Sadly, most companies no longer offer pension scheme benefits to their employees anymore. This means that retirees must now rely on alternative income sources – and not just Social Security benefits either anymore. 

Start Saving as Early as Possible

The sooner you implement a savings plan for retirement, the better. Financial experts usually recommend that you should start investing in a diversified portfolio at least 15 years before your planned retirement date. However, if you’re able to do this earlier, you’ll be able to take advantage of compounding interest over a longer period of time. 

Develop a Workable Plan

It’s essential to have a plan set up that details the amount of money which will be withdrawn from your nest egg each month – also keep in mind that there may be some months where expenses will be higher than others, like at Christmas time. As such, you’ll need to determine your monthly living expense requirements and plan on withdrawing 4% or less of your retirement savings annually. 

Diversification is Crucial

Although stocks and other investments can increase substantially in value, they can also take a sudden dive when least expected. As such, it’s essential that your retirement portfolio be diversified so that it includes annuities, bonds, CDs and stocks.

Social Security as a Supplement to your Income

While Social Security payments will currently provide a steady form of monthly income, it’s recommended that you only start claiming these funds well after the age of 65 – otherwise you could lose as much as 20% of what your payments could actually be. 

At present, the minimum age for retirement is 62. However, most individuals won’t qualify for their full Social Security amount until reaching between 66 and 70 years of age. If you’re not keen to wait this long before retiring, you may either have to continue working until this time or ensure that you can receive income from alternative sources until reaching the right age to claim from Social Security.

If you would like to ensure that your retirement is as financially stress free as possible, get in touch with our team today. We’ll be happy to assist you with setting up a realistic savings and investment plan.

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