Brett Farve and Delayed Retirement

In case you didn’t catch it, the Wall Street Journal had a great article that used Brett Farve as a role model for how we should approach retirement (“At What Age Should You Retire?“). Most bosses wouldn’t be as understanding if we changed our mind about retiring as many times as the Minnesota Vikings quarterback, but the point the author was trying to make was that by delaying our retirement, we ultimately put ourselves in the best financial position possible.

Retiring early is a goal for a lot of people. But the point of the article was that most people save far too little for retirement – according to the Employee Benefit Research Institute less than half of workers have saved over $25,000 for retirement – a sentiment echoed by author Jane White. With that being the case, for most people it makes more financial sense for people to work longer and take retirement benefits later, else they run the risk of running out of money, forcing them to either pursue government help or rely on family in their later years. Neither of those options is an ideal situation.

The second point the article made that caught my attention was the sustainability of Social Security benefits. The Social Security is challenged both by political and demographic sustainability issues. I’m 26 years old, and I can honestly say that I don’t expect Social Security to be around by the time I turn 62. If it is, I can’t count on it being enough to get me through retirement, an issue that we touched on earlier.

The WSJ article suggests staying in the work force until the age of 70 (!!!). It’s difficult for me to think about working for the next 44 years. But the take away lesson in all of this is prepare for retirement now. It’s better to go overboard on the savings than to find yourself short decades later when you need the money. In some cases, if you have an IRA, you’ll be able to pass the funds on to your children tax free, so you don’t lose anything by ranking up your savings. Reading that WSJ article has for me reemphasized the importance of retirement savings, and it certainly motivated me to go bump up my 401(k) contributions by a few percentage points.

Michael
Twitter: @michael_dink