The article discusses the importance of saving and, more specifically, for workers to continue working beyond their retirement age. Fahlund Christine and T. Rowe Price support the idea of people saving for retirement. Fahlund argues that individuals can stop saving for retirement after attaining age 60, and they can use the money they were putting into their savings account and spend it on enjoyment, such as having more trips. The article discusses the benefits of “practice retirement” (Fried, 2012).
The article postulate that for individuals to get such benefits need to have made significant savings by the time they attain age 60, and they also need to commit themselves to work past their early 60s. In addition, the article argues that individuals must use the income they are earning after attaining age 60 while their savings and social security benefits remain untouched in order to gain value. The article also demonstrates the way in which individual’s retirement can become more comfortable in the event that they worked well into their 60s (Fried, 2012).
Individuals are viewed as to preserve their savings as well as delaying their social security when they work past their 60s. According to the article, “practice retirement” should be undertaken after an individual has saved a healthy sum of money in the account (Fried, 2012). The article also argues that when individuals work for an extra year after their retirement age, they are able to considerably increase their eventual retirement income by 9 percent on average. Individuals are also urged to avoid going into retirement with debts. Individuals can benefit from using their savings during situations such as when they lose job, when they get sick and even in the event that market collapsed (Fried, 2012).
Article Reflection
The article is quite interesting since it demonstrates a possible way that can be adopted by individuals in order to have a guarantee of a less problematic future. The discussed concept seems to be applied by most political leaders all over the world. For instance, most of the past and present African presidents and senior leaders have remained in offices past their 60s and at most times they have even advocated for people to work beyond their retirement age. I have come across several retirees who were once very rich and had made several savings before retirement, and now have already cleared their savings and are struggling to survive due to financial problems (Bodie, 2000).
The article to some extent gives advice to individuals who have attained the retirement age to consider the option of extending their employment after the early 60s. This is because of the several advantages that accrue to individuals in the event that they do not start using their savings and social security benefits after retirement. Again, working for additional years after attaining retirement age may imply that one’s retirement savings may not stretch over for many years (Utkus, 2000).
Additionally, one’s savings are able to grow at a faster rate if an individual works even until 70 years. Again, when individuals delay claiming their social security they are able to lock in a higher payout in the event that they hold off. Individuals are also able to reduce their out-of-pocket costs related to health care. I can apply the concepts of the article to my own life. This is due to the fact that the “practice retirement” can help me in enjoying my life after retirement. In addition, as I work to my late 60s or 70s, I am able to keep myself physically fit because the body remains physically active (Utkus, 2000).
References
Bodie, Z. & Robert, C. M. (2000). Finance, Upper Saddle River, N.J.: Prentice Hall.
Fried, C.A. (2012). Live for Today, Save for Tomorrow: What if working longer meant more fun, not less—and a bigger nest egg, too? You can make it happen if you start planning now. AARP The Magazine, pp. 43–44, 60–61.
Utkus, S. (2000). Discussion at the Pension Research Council Conference on Financial Innovations for Retirement Income, Wharton School.