Retirement Planning for Folks in Their 50’s

It's a great time to fine tune your retirement plan.

couple in kitchen drinking coffee

So you’ve moved up the career ladder to the point where the next rung puts you in the executive suite. But someone else is already in the position that’s the next logical step for you. And they’ve been there a long time — with no sign of departing anytime soon.

Does that make you feel unhappy?

Depressed?

That’s apparently how people born between 1962 and 1971 (ages 47 to 56) are feeling now — partly because of scenarios like this one. Historically, as people got older, they became more at peace with their financial situation, but that’s not happening as often with the current crop of middle-agers. They find that they’re not doing as well financially as they expected at this point in life — and they’re not happy about it.

As a result, they’ve been called Generation Grumpy or the Grumpy Middle. And they’ve been this way for years, according to the University of Chicago’s General Social Survey.

If you are part of Generation Grumpy, you’ve been financially unhappy as far back as the early 1990s, when you were still in your 20s. By 2016, as a middle-ager you were 12 percent less likely to say you were satisfied financially and 18 percent more likely to say you were unhappy. Americans in their 20s and 30s have always expressed a higher degree of anxiety about finances, but this is the first time in the survey (it’s been taken since 1972) that the dissatisfaction has crept so far up into middle age.

Although people in this age group earn more than their younger colleagues, they aren’t earning as much as older workers earn. And older people are staying in their high-paying jobs a lot longer than workers of their age did in the past, keeping Generation Grumpy from ascending into those jobs. Today, about 1 in 7 Americans over age 65 worked full time last year, compared with only 1 in 12 in 2000, the study says.

Of course, it’s natural for anyone in their 50s to assess their financial situation based on where they thought they would be or should be at this point. Perhaps you’re silently comparing yourself to colleagues, old college classmates or your siblings. If they seem to be doing better than you are, you could be unhappy or dissatisfied with your accomplishments.

Worse, those feelings might turn into a sense of helplessness and inertia. You may believe there’s nothing you can do to improve your situation.

Instead of thinking that way, turn that negative into a positive. Rather than comparing where you are to where you thought you should be, measure your status according to where you need to be. You might discover that you’re in much better shape than you realized.

Unfortunately, many folks don’t know how to ascertain their true financial condition.

Some who come into our offices for the first time seem nervous or fearful about what they assume we will tell them. Naturally afraid of the unknown, they might be embarrassed that — to their way of thinking — they haven’t saved as much as they believe they should have, and they’re afraid we’re going to highlight that fact. They fret that we’ll tell them that, instead of retiring at age 62, they’ll need to work until they’re 82. Yikes!

But we’ve found that such preconceived notions usually are based on people’s inaccurate assessments of themselves.

Many are happily surprised to learn that a mere tweak or two is all that’s needed to help keep on track. Instead of retiring at 62, for example, they might need to work an extra year or two (rather than a decade or two!). Or they discover that instead of running out of money if they spend $100,000 a year in retirement, everything will be fine if they limit their yearly spending to $95,000.

It’s true — these kinds of small changes really can make a difference in your long-term financial situation. And if you discover this, your grumpiness can turn into joy. 

Perhaps you know of family members or friends who are disappointed with their lot in life, worried that they’re not as prepared as they should be for the future. Please ask them to contact us. We’ll challenge the premise that their situation is bleak — and perhaps help them see that a few tweaks to their personal finances can make a real difference. 

And you’ll be happier because that friend or relative won’t be grumpy anymore.

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