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Home > Blog > Estate Planning > Your Plan to Work Until You Are 70 May Backfire

Your Plan to Work Until You Are 70 May Backfire


Ensuring financial stability during retirement is becoming more difficult for each successive cohort of retirees.  Our income has less purchasing power than our parents’ income did, and employer-provided retirement pensions are getting harder to find.  Today’s workers are lucky if their employers contribute to a retirement count for them at all.  Even having your employer withhold taxes is starting to feel like a luxury, considering how much of the workforce survives on 1099 gigs, paying back a whopping 30 percent of their paychecks in taxes.  Retirement planners have long advised clients that staying in the workforce past age 65 is a financially sound choice, because it means that you spend more time building up your savings and less time saving it.  Going to work at age 66 no longer feels like a victory lap; it is more of an economic necessity, even for salaried employees with an annual household income in the six figures.  As with your Social Security income, you may be in for an unpleasant surprise about the amount you receive in senior paychecks.  If you are planning to work until you are 66 or older, the best way to get a realistic view of how your retirement finances will be is to contact a Bronx estate planning lawyer.

Most People Who Work Past Age 65 Retire Earlier Than They Originally Planned

If you wait until you are 70 to start drawing Social Security, you will receive the maximum amount in monthly Social Security income.  Therefore, it makes sense to stay in the workforce until as close to your 70th birthday as you can, in order to maximize the size of your Social Security check.  The problem with this plan is the same as with any plan that goes, “If I do X, then I will get Y amount of money.”  Working until you are 70, as with any other value you may substitute for “I do X,” depends in part on factors outside your control.

According to Greg Iacurci of CNBC personal finance, most people retire earlier than they originally planned to retire, unless they had their hearts set on getting rich and retiring young.  Iacurci even has a mathematical formula for it.  Subtract 61 from your anticipated retirement age, and then divide the difference in half.  Add that number to 61 and you will get the age at which you should assume that you will retire.  In other words, you will probably work half as long past your 61st birthday as you think you will.  The reasons people retire earlier than they planned are several.  Some retire because of health reasons, some because of involuntary job loss, and some because their financial situation took a turn for the better, and they could afford to retire earlier than they expected.

Schedule a Confidential Consultation With a Bronx Estate Planning Attorney

An estate planning lawyer can help you make a realistic estate plan that involves working beyond your 65th birthday.  Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.



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