Will you want to work after age 65? Or will you have to?

From an investor’s perspective the ups and downs of the last four months have been the equivalent of zipping through a five-minute roller coaster ride in two minutes flat. It’s been a long time since yours truly has actually been on a roller coaster, but as I recall, you’re strapped in and firmly held in place by a sturdy safety bar. 

Without such security features your chances of getting injured are significantly increased. And, theoretically at least, your apprehension level is substantially decreased.  

That scenario is similar to what many investors have recently faced. 

If, during this wild financial ride, you unbuckled and jumped off, your investments probably took a hit. If you remained seated, safe and secure, your finances may have had a bumpy ride, but they and you likely came through without much damage.

A recent study by the Consumer Financial Protection Bureau highlighted that nearly half of recent retirees are able to maintain the same level of spending during their first five years of retirement. When I sit with a pre retiree, it’s common for them to say that they’ll spend less in retirement and be able to get by with less. 

I then ask what part of their lifestyle they want to eliminate. More often than not, the response is dead silence. In other words, most people don’t want to reduce their lifestyle. That’s why there’s a growing trend of people working after they retire from their primary occupation.

The CFPB study emphasized two key points. The first is that your chances of being able to maintain your spending habits are greater if you’re a homeowner, and especially if your mortgage is paid off. So clearly, home ownership should continue to be a priority. 

And second, those that wait to begin collecting their Social Security benefits after their full retirement age tend to do better than those that choose to take it early.

Overall, I think the trend for people to remain in the workforce well beyond the traditional retirement age will continue. The immediate reaction is that those who do work beyond 65 do so because they have to. That’s undoubtedly a plausible explanation, but I also believe many will remain in the workforce simply because they want to. 

For many, the reasons for working beyond retirement age have nothing to do with money issues. Legendary investor Warren Buffet, who has more money than he could ever spend, is still plugging away at age 89. In the November election our choice is between two candidates who could have retired long ago. One has amassed a considerable fortune while the other is eligible for a very sizeable government funded pension. So, in the future when you see an elderly person still working, don’t just assume he or she is doing it for their financial survival.

On another note, COVID-19 has shaken our very foundation. Many have recently lost loved ones and this will be their first Father’s Day without dad. I know it’s difficult, but somehow, someway you have to move forward.

I miss my father, but I take great pride in seeing what good fathers my sons have become, knowing that my dad had some role in their development. So once again, I wish all the dads out there a Happy Father’s Day.