A significant percentage of people go through life expecting that they will retire when they reach their mid-to-late 60s without making any particular plans to make this possible. This is a mistake, and it is one of those mistakes that you don’t just learn from and then dust yourself off and walk away all the wiser. If you wind up unprepared for retirement financially, you are not going to have the opportunity to recover and you may well have to work until you become physically and/or mentally incapable of doing so.
Retirement is not an entitlement or a magical birthday gift that you are given when you reach a particular age. It is simply a word describing the act of putting your working years behind you. Most people work because they need the money, so no matter what age you are, if you can make ends meet without working you’re going to have to continue earning a paycheck. It’s as simple as that.
So why are there so many people who do not develop retirement plans and stick to them? Perhaps the primary reason would be that they are under the impression that they will be able to retire when they reach full retirement age as defined by the Social Security Administration. At the present time that age is 66 for people who were born between 1943 and 1954. Subsequent to 1954 the retirement age goes up by two months every year until 1960; people born during that year and after become eligible for Social Security at the age of 67.
The income that is derived from Social Security is not going to be enough for many people to live on comfortably. At the present time the average monthly Social Security check is all of $1072. So if you don’t do any additional planning because you think that reaching your full retirement age as defined by the Social Security Administration is going to result in the ability to retire you may want to think again.