Almost 70% of Americans Are Considering Working During Retirement Years Because Of Rising Costs And Financial Uncertainty — How To Avoid Joining Them

As the economic environment continues to shift, so does Americans' approach to retirement. 

According to a survey by Nationwide Advisory Solutions, 69% of Americans nearing retirement are rethinking the traditional idea of retirement. Rather than completely stepping away from work, they’re considering staying in the workforce during their retirement years. This significant shift isn’t just about financial necessity — it reflects a deeper change in attitudes toward retirement.

Of those surveyed, 44% indicated that working during retirement is essential to extend their savings and meet living expenses. The decision to continue working also encompasses nonfinancial factors. Many participants — around 60% — express a desire to stay active and engaged, while 41% are looking for a continued sense of purpose.

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When it comes to retirement living choices, economic factors are a major influence. The survey found that 40% of future retirees are considering moving to areas with a lower cost of living and favorable tax conditions, rather than prioritizing proximity to family. This highlights the impact of economic conditions on retirement planning decisions.

The survey also sheds light on the role of financial advisers in this evolving scenario. A gap in confidence levels is evident between those managing their finances independently and those working with professional advisers. Investors with advisers tend to be more nervous about their retirement savings, possibly because of a greater understanding of financial risks, underscoring the value of professional financial advice.

A significant portion of pre-retirees is adjusting their retirement timeline. Concerns over inflation and market volatility are leading many to consider retiring later than initially planned, with some even uncertain whether they can retire at all. In response, financial advisers are focusing on strategies to safeguard assets against market risks and ensure sufficient liquidity.

In reaction to these trends, investment strategies are adapting. Tools like robo-advisers and target-date funds are becoming more popular, offering a balanced approach to retirement savings.

To avoid being part of the 69% of Americans who might have to work during their retirement years, it’s crucial to adopt proactive financial strategies. Here are some tips:

Start early: Begin saving and investing as early as possible. The power of compound interest can significantly boost your retirement funds over time.

Diversify investments: Don’t put all your eggs in one basket. Diversify your portfolio across different asset classes, including stocks, bonds and real estate.

Invest in startups: While this involves higher risk, investing in startups can potentially offer substantial returns. It’s important to research thoroughly and understand the risks involved. Allocating a small portion of your investment portfolio to high-growth startups could significantly enhance your overall returns.

Maximize retirement accounts: Take full advantage of retirement accounts like 401(k)s and individual retirement accounts (IRAs). If your employer offers a 401(k) match, ensure you contribute enough to get the maximum match.

Live below your means: Adopt a lifestyle that allows you to save more. Cutting down on unnecessary expenses can free up more money for investments.

Seek professional advice: A financial adviser can provide personalized advice based on your financial situation and goals. They can help you navigate complex investment decisions and tax planning.

Continual education: Stay informed about financial markets and investment opportunities. Knowledge is a powerful tool in managing and growing your wealth.

Real estate investments: Consider investing in real estate, which can provide both rental income and property value appreciation.

Health savings account (HSA): If you’re eligible, contribute to an HSA, which offers tax benefits and can be used for medical expenses in retirement.

Side hustles: Develop a side business or hustle that can provide additional income now and potentially in retirement.

Delay Social Security: If possible, delay taking Social Security benefits until full retirement age or later to maximize the monthly benefit.

Regular portfolio reviews: Regularly review and adjust your investment portfolio to ensure it aligns with your risk tolerance and retirement goals.

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