People Will Work Until Death in The Future, or Even Sooner

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(— June 1, 2020) —  Founder, and CEO of Edelman Financial Services, Rick Edelman, believes that the current concept of retirement will disappear soon.

In his book “The Truth About Retirement Plans and IRAs” Edelman states that soon there will be no more classic sequence of events: we are born, we go to school, we work, we retire and wait to die.

According to Edelman, in the future, the life expectancy is very likely to increase drastically, which means that we may live to be 110 or 120, and the idea of ​​retiring at the age of 65 will not be sustainable. Namely, “if we live 120 years and retire at 65, how will we earn for, that is, afford another 50 or 60 years of free time?” asked Edelman.

“It’s over with the idea of ​​retirement. It was an innovation of the 20th century that was not present in the 19th century and that will not be in the 21st, wrote Edelman who believes that people will work as long as they are healthy regardless of their age.

The ugly truth is, however, that more seniors are planning to skip retirement and work for as long as they can because they just can’t afford to stop. They either don’t have a retirement plan at all or they calculate that money from their retirement funds is not enough for them to survive. Many seniors in the U.S. believe they can offer more work even in their later years.

According to MarketWatch article, half of Americans said they retired before they were ready because of factors outside of their control — and that was before the coronavirus became a global pandemic. The article says the global pandemic may make it even harder for people above 65 to afford to retire.

There are also numerous cases in the U.S. of workers being laid off near retirement, especially during the CPVID-19 pandemic.

“Everything is going to have a negative impact on retirement security,” said Alicia Munnell, director of the Center for Retirement Research at Boston College.

Munnell said the market is down and that unemployment is up, so people are forced to use their pension funds to survive the crisis, which means they will try to work for as long as they can. “They may be forced to tap into their savings,” she said. “The CARES Act made it easier but that should be a last resort.”

The good thing though is that Social Security still functions in the U.S. But even with that program Americans should be cautious, Munnell said because the service could collapse if there are too many people claiming it.

Some workers may be forced into retirement, and have to start claiming Social Security benefits earlier than anticipated, Munnel warned.

The collapse of retirement funds and Social Services is not as unlikely as it seems. The COVID-19 crisis showed us how fragile the system we are living in really is, and a scenario in which people just can’t afford to retire is upon us much before we are able to expand our life expectancy.