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Retirement in Sight – April 2016

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COPING WITH SUDDEN RETIREMENT

Many of us may retire earlier than we anticipate. In fact, a recent Voya Financial survey found this to be true for 60% of Americans. The reasons for a forced retirement varied from health issues (16% of respondents) and job loss (11% of respondents) to becoming a caregiver to a loved one (3% of respondents).

If it happens to you, how should you respond? One, you might look for a part-time job you can still perform; less physically demanding work, or work you can do at home without a commute. Look at your savings, and the way they are invested, with an eye on protection.

Slash your expenses wherever you can: think about living with one car, eating in more often, even downsizing to a smaller residence if it looks like that might be cost-effective. Look at unemployment insurance; if you were working full-time and you were laid off or your job was eliminated, you are likely eligible. If you are 62 or older, think twice about immediately applying for Social Security; remember, your monthly benefit grows larger with time. The value of such incremental gains should not be dismissed. If waiting another year to apply means that your monthly benefit will be only $80 higher, that $80 difference will still put $20,000 more in your pocket over the course of a retirement lasting more than 20 years.1

DOES MORE MONEY MEAN A BETTER RETIREMENT?

Is there a correlation between wealth and retirement well-being? Some recent research indicates that greater income does promote greater happiness – but only up to a point, with other factors just as vital.

CivicScience, a market research and opinion-gathering firm, has been polling Americans on their level of happiness for the past two years. It finds that retirees are among the happiest Americans, and that affluence is but one element in that happiness. It notes that satisfaction with life seems to peak when people have incomes of between $100,000-$125,000; people at that income level are 12 times more likely to say they are happy than unhappy, but people earning more don’t report being any happier. CivicScience notes that Americans aged 65 and up are 14 times as likely to say they are happy about their lives compared to those in younger age groups. Those describing themselves as “healthy” are 11 times as likely to say they are happy than those who feel they are unhealthy. Those who say they are “very happy” in their job are 21 times as likely to report being happy as those who dislike their job, perhaps an encouragement for pre-retirees who are considering working for a few more years.2

 ON THE BRIGHT SIDE

A study published this winter in the American Journal of Preventive Medicine concludes that retirement has health benefits. University of Sydney researchers tracked 25,000 older adults and found that retired subjects enjoyed 93 minutes more of physical activity per week and 11 more minutes of sleep per day.3

 

Kent Butcher may be reached at 918-747-5585 or kbutcher@upal.com
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DISCLOSURE

This material was adapted from MarketingPro, Inc. content and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

CITATIONS.
1 – fool.com/investing/general/2016/04/02/forced-into-retirement-5-smart-moves-you-can-make.aspx [4/2/16]

2 – cbsnews.com/news/is-more-money-the-key-to-a-happy-retirement/ [9/28/15]

3 – consumeraffairs.com/news/retirement-can-lead-to-improved-health-study-finds-031416.html [3/14/16]

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