Sure You’re Saving, But When Will You Retire?

When retirement expert Kerry Hannon speaks to audiences around the country, she can see “the palpable fear in their eyes.”

“They’re going to outlive their money,” she said. “A lot of people have not saved for retirement (and) they need to work.”

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Source: 2016 Retirement Confidence Survey

People are living longer than ever and saving less during their careers. One in four 65-year-olds today will live past age 90, USA Today reported. And, with the average retirement age sitting at 62 these days, that means some retirees will need money to last almost 30 years or longer. That’s a high bar to reach.

Instead of a vacation, a second career

Because of that, more and more people are starting new jobs, and even new careers, once they retire from their first, said Hannon, author of “Great Jobs for Everyone 50+.” That will be the case for many of our parents. And likely for us, too.

A 2015 Nerd Wallet study predicted the average millennial will really be able to retire at age 75, thanks to expensive rent and our huge collective student loan debt. Others predict many of us will never retire, ever.

While that might sound scary, Hannon doesn’t see it as a bad thing. If trends continue, millennials will have a “myriad of jobs in this patchwork quilt of work you do.”

“If you stay healthy, you’re going to keep wanting to stay in the world and do things,” she said. “There might be a time in your life where you’re trying to make the big bucks. Then there’s a stage in your life when… you’ve met some of those goals, you’ve met those life stages, and you’re ready to keep doing fun stuff and keep mentally alive and engaged in the world.”

Work longer, retire stronger

Grant Sabatier, founder of Millennial Money, wrote that he doesn’t plan to ever fully retire: “To me that actually sounds pretty boring–why would I want to ‘disengage’ for the rest of my life? … I don’t imagine ever just ‘checking out.’ How many rounds of golf can someone play, anyway?”

Many people continue working out of necessity—they need to (or want to) pay bills without dipping into their retirement savings. Money expert Suze Orman suggests everyone hold off on retirement until they’re at least 70, which more people in the workforce —almost 40 percent—are planning for than ever before, according to the 2017 Retirement Confidence Survey.

“The bottom line is that working longer is the key to a secure retirement,” Orman wrote for Money. “Every dollar you don’t spend in your 60s is a dollar that can keep growing for your 70s and beyond.”

But a lot of folks have an encore career because doing a job they enjoy makes them feel happy and fulfilled.

“In the last several years what’s changed about retirement is work is not a four-letter word anymore,” Hannon said. “It’s something people look forward to doing in retirement, even if they have saved. …

“Lifelong learning is absolutely nonnegotiable, particularly for millennials.”

Regardless, our retirement is going to look a lot different than it has for past generations. And it might be time to start tempering expectations.

What can you do to stay on track?

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Source: 2017 Retirement Confidence Survey

Financial expert Erin Lowry, author of “Broke Millennial: Stop Scraping By and Get Your Financial Life Together,” is hesitant to give savings benchmarks we should be hitting by age 25, 30 and so on. Trying to hit those can get pretty overwhelming and discouraging. It’s better to focus on making “proactive choices in our 20s to save for our futures.”

“Instead of comparing yourself to the benchmark,” she said, make sure you are “saving the best that (you) can every single month” — “diligently and consistently saving into a savings account,” as well as an emergency fund.

If you’re having chunks of your paycheck go directly to savings accounts, revisit those direct deposits, take a look at your budget and make sure you’re putting away as much as you can. If you’re not already doing a direct deposit, it’s a good idea to start. And if your workplace offers a 401k match, make sure you’re maxing that out if possible.

A new report by Bank of America suggests millennials are getting better at socking away cash for the future. A survey of 2,000 adults ages 23 to 37 revealed that one in six has at least $100,000 saved, and nearly half has at least $15,000, up from 8 percent and 33 percent, respectively, in 2015.

One of the factors making it difficult for many millennials to save is student loan debt. That’s why you should also have a plan to pay it off as quickly as possible, rather than merely paying the minimum every month, Lowry said. Come up with a more aggressive payment schedule based on your budget and stick to it.

Developing healthy habits today is also an investment in the future, Lowry said, though it is rarely framed that way.

“Health is wealth at the end of the day,” she said. “(Keep) yourself healthy and (build) your behaviors when you’re young. … Stay healthy now and minimize health costs in your life. You never know what’s going to happen, but we do the best we can.”

Katie Moritz

Katie Moritz is Rewire’s web editor and a Pisces who enjoys thrift stores, rock concerts and pho. She covered politics for a newspaper in Juneau, Alaska, before driving down to balmy Minnesota to help produce long-standing public affairs show “Almanac” at Twin Cities PBS. Now she works on this here website. Reach her via email at [email protected] Follow her on Twitter @katecmoritz and on Instagram @yepilikeit.