Retiring has become a luxury for people who either have a lot of money or who have perfected the art of frugality and, at times, freeloading. I refuse to work once I reach my full retirement age, which makes me part of the minority. According to a recent article by The Los Angeles Times, 4 in 5 older Americans plan to keep working in retirement. A poll by the Associated Press-NORC Center for Public Affairs Research indicated 82 percent of workers over the age of 50 intend to work in retirement. As a member of the "slacker" Generation X, I have absolutely no intention to work beyond age 66. If I have success in the financial markets, I might even retire at 62. At the age of 40, I still have time to catch up so that I'm not in the predicament of many baby boomers. I wish I was further ahead, but I have a plan that will allow me to quit working at age 66.
Retiring on someone else's money
Since my husband loves working, he has volunteered to work until 70 or beyond. I will be able to delay taking my social security benefits until I'm 66 or possibly even 70. We should be able to live on his income alone so that I can stop working at 62. If for some reason he can't work, I'll continue working until age 66. Since he is older than me by a few years, we can wait and see how he feels in his 60s.
Saving double for retirement
According to the survey, 39 percent of American workers age 50 or older have less than $100,000 saved for retirement. One-quarter of the respondents had less than $10,000 saved. With $100,000 saved up, I already have already saved more than the half of people in the older generation. My strategy is to save twice as much as I used to save by contributing both to a Roth IRA and a 401(k) plan through my work.
Depending on dividends
I can't depend on the stock market to deliver double digit gains every year leading up to my retirement. However, I can invest in mutual funds and exchange-traded funds (ETFS) that let me share in the profits of companies through quarterly dividends. I hope to build up enough of a "position" in various dividend-paying ETFS that I can expect a dividend paycheck. I do the extra legwork to check and see when the dividends are paid so I can receive dividends almost every month of the year.
Some people argue that they would be bored if they retired. However, most of the people in their 50s and 60s who intend to keep punching the time card in their golden years simply don't have enough income to get by. Instead of working at a job, I'd like to take up volunteering in the community. I think the baby boomers have scared me into saving much more for retirement than they would have saved. Because I see how hard it is for them to juggle all their expenses after retirement, I am paying off all my debt including my mortgage and car debt. Hopefully, I can retire with no financial worries if all goes according to plan.
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