If Working Longer is Retirement Plan A, What is Plan B?

Retirement surveys seem to be everywhere. Many organizations are very interested in asking baby boomers about their retirement goals and/or about how well they have prepared for retirement. Today, the Transamerica Center for Retirement Studies released the results of its survey of 4,080 U.S. workers. Not surprisingly, the news is not good.

Here is the data that I found the most interesting:

  • 40% of those surveyed say that they expect to work longer and retire later as a result of the present recession.
  • 39% plan to retire after age 70 or not at all. (Wow!)
  • 54% plan to “work in retirement” (after age 65), the most common reason being economic necessity.
  • 70% say that even if they worked full-time until age 65, they would not have enough money to retire. (59% of those who make over $100k also say this. Incredible!)

Taking the results as a whole, it is clear that retirement Plan A for a large percentage of U.S. workers is “keep working”, with economic need being the driving force.

OK – if that is Plan A, what is Plan B? Winning the lottery?

I am empathetic to anyone who suffered severe losses in the market downturn. It happened to a lot of us. I also understand “working longer” as Plan A because that is what many financial planners recommend.

For folks who are forced to work into their late 60’s and beyond, Plan A can collapse in a hurry, for health reasons or just because there are not enough jobs available to older workers. (Age discrimination still exists everywhere.)

The only retirement Plan B that may be available to those who plan to work forever is to do a slash and burn job on their current spending and standard of living. Downsize now, sell a car, cut discretionary costs, get the adult kids off the payroll, and aggressively save the surplus. Spending those last-minute savings early in retirement may also allow those workers to delay claiming Social Security benefits until age 66 or even age 70, adding 8% to their benefit for each year of delay.

I suppose the bottom line message is simply this: Plan A may work, but give the uncertainties of employment as an older worker, you also need a Plan B.

So what is your Plan B?

Here is a link to the Transamerica survey.


  1. says

    My husband, had he been surveyed, would have been part of those percentages cited above, even though we planned for retirement and have been pretty conservative. I think he’d have said “economic necessity” simply because he’s always been concerned about the costs of health care!

  2. sherry says

    I’m 55 and my husband is 51. We both are software engineers. For sure I’m not going to work past 65. My husband likes his job and would like to work to 65 but in a fast paced industry we’re not sure if he chould last that long.

    I think we are typical boomers and our retirement plan A is I retire next year, and my husband retire when he’s 60. We’d like to enjoy our lives, travel (living) abroad for the first 10 years of our retirement. Our plan B is I retire at 60 and he retires at 65.

  3. says

    I think the best plan B is to look for another way to increase one’s income. There are many ways for doing this. Working online is one. Older people have the right experience that many of the employers online are seeking. So, they can seize the opportunity.

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