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To the degree that people reach old age mentally sharp, physically fit, and financially secure, the problems of individual and societal aging fall away.”
— Laura L. Carstensen, Founding Director
Stanford Center on Longevity
According to a Stanford study on planning for retirement at a time when we’re living longer than ever before, confidence in the ability to retire comfortably — or even to retire at all — is at a new low. Pitfalls include:
- Failing to plan for retirement
- Underestimating expenses
- Underestimating the number of years they will be retired
- Retiring too early
- Failing to save
The biggest challenge is failing to plan for retirement at all, researchers say. Only a third of adults in their 50s have ever tried to devise a retirement plan…and only two-thirds of those who have tried have succeeded.
Even among those who do save, fear of limited resources tops the list of retirement concerns. According to a Bank of America Merrill Lynch 2013 Workplace Benefits Report, in a nationwide survey of more than 1000 employees from companies of all sizes:
- 80% experienced an increase in health care costs in last two years (this may change under the Affordable Care Act)
- 56% are saving less for retirement as a result
- 85% feel they’re not saving enough
- 60% believe it will be “very difficult” to ever save enough to support their standard of living once they retire
- 79% would give up 5% or more of their salary if it meant having reliable income to help them live comfortably during their later years (38% would give up 10% of their salary — or more).
Though neither research report mentions reverse mortgage as a viable option for older adults once they reach retirement age, given the monetary concerns now facing those in late middle age or nearing retirement, this group appears to be a ripe market to consider the possibility, assuming someone owns a home with sufficient equity to qualify.
Yet continuing to earn isn’t the only reason for seniors to postpone retirement, says U.S. News & World Report, which suggests there are a number of good reasons to retire the idea of retirement for a while yet, such as:
- Enjoying one’s job. While boss-bashing makes for humorous cartoons and water cooler conversation, people who love what they do need not retire just because they reach a certain age. Boomers, especially, are aging (and perceive aging) much differently than previous generations. A professional hair stylist, for example, is still booked months ahead because she takes time off to travel. At 67, she has no plans to retire anytime soon.
- Improved health. Contrary to popular belief, working longer may actually enhance later life health: one study of nearly half a million French workers found that every additional year of work before retirement lowered the risk of dementia 3.2 percent.
- Marital accord. Women have long maintained that once their husbands retire they’re underfoot all day and at loose ends, which can wreak havoc on a marriage. The longer at least one partner continues working, the better it may be for marital harmony. The extra income is a bonus.
By balancing data on the necessity of planning for retirement with the positives about continuing to work, you can present a more informed picture to potential reverse mortgage prospects to help them make the best possible decision for a secure future in the age of longevity.