Recession & RetirementPosted: November 9, 2011
If you’re nowhere near retirement age yet (a number that keeps changing, by the way), you might not have given much thought to the possible impact the latest recession has made on the concept and timing of retirement. It’s something that you might want to think about, though, because ignoring it could be a recipe for disaster.
A recent article by Emily Brandon in US News & World Report lists several conditions that are affecting people’s retirement plans: unemployment, falling income, declining retirement benefits, few options to recoup losses, and increasing reliance on Social Security. Brandon notes that although the recession has affected all age groups, it has had the greatest impact on older adults. For those inclined to pessimism anyway, this is not good news! Being naturally an optimist, I tend to take a somewhat less gloomy outlook, but there’s no denying that the situation is challenging at best.
Just as an example: If people are putting off retirement longer because they feel they can’t afford to retire when they originally expected to, they’re staying in (or trying to stay in) their jobs; this means those jobs aren’t opening up for other would-be employees to fill. Another example is that people who are continuing to work longer are probably not indulging in the leisure-time activities they had planned to engage in during retirement, and that pull-back could affect others who work in the industries and regions where those activities would occur. It’s a ripple effect.
What can you do? First, don’t press the panic button! Seriously, knee-jerk reactions to potentially dire news can cause us to make unwise decisions that we could well live to regret. They can also prevent us from seeing and exploring possibilities that might improve our retirement situation–whether we’re nearing retirement age or still many years away from it. Wise career management definitely comes into play here, along with good financial sense. Impulsiveness can have a positive place in our lives, but probably not when it comes to preparing ourselves for retirement.