December 10, 2023

Changes That Affect Your Retirement Plan

Retirement planning does not follow the same methods for people about to retire as compared to those who have already retired. It is also possible that some of the methods that may have applied in the past may no longer be applicable today. There are certain factors at play.

Recent changes in both the economy and the world in general may have led to certain retirement rules to change. In the US, these changes may have significant effects on how people now view retirement as well as how they start preparing for it. Here are some of the things that the changing times may have affected retirement planning in recent times.

Retirement Age Changes

In the recent past, the traditional retirement age among the working population stand to be around the age of 65. By that time, people may have already amassed a comfortable retirement fund to buoy them up through their retirement. But in recent years, there are more and more people who are deferring their retirement at a later time to add a year or two to their working life. One common reason for this change is the tough economy that most people have to go through today.

There are many people whose retirement plans have suddenly been derailed due to the tough economic conditions. It is not so much that most people enjoy working for another year or two after their traditional retirement age. It is always a matter of trying to make up for a significant reduction of their retirement nest egg as a result of a bad economy.

Ideal Retirement Location

In the past, it was a common retirement move for most people to eventually sell their house and relocate into some other location that is more relaxing. This option seems to have become less and less common for current retirees. Most of them are now deciding to just stay put and enjoy their retirement where they currently are. A big share of this change has to do with the current condition of the housing and real estate market.

Most people see their home as a big part of their retirement fund. It may be unwise for would-be retirees to sell their home by the time they retire. But at this current real estate market, they might likely end up in the losing end if they sell their home now. This might be part of the reason why they might opt for staying where they are during their retirement years.

Source Of Retirement Income

Over the years, there have also been changes seen in terms of where retirees source their retirement income. More and more of them seem to be becoming more reliant on Social Security. The percentage has steadily been increasing over the past several decades. Around 2/3 of American retirees consider Social Security for 50 percent of their retirement income. There are more than a third who have 90 percent of their income sourced from their Social Security.

Given the current economic conditions, the reliance on Social Security for retirement income may become quite a serious issue among retirees. This is something that upcoming retirees should be aware about.

The current needs for retirees have gradually changed over the years. There are different factors to consider that always require close monitoring at certain periods. Things like commodity prices, inflation rate, economic climate, as well as health status can greatly affect any retirement plan. Hence, there may always be a need for others at some point to rethink their own retirement goals and even make some much needed changes on their retirement planning.

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