Patrick Ow shares the current problems with planning for retirement.
50. Unemployed Employees Become Liabilities
After all the personal income taxes paid by employees over their working life, don’t count on governments to financially provide for them in return when they do decide to retire or are retrenched from employment.
The cruel fact remains: no one wants liabilities.
In a period of declining tax revenues, an aging population, and increasing welfare expenditure, governments prefer employees to continue working (enabled by outdated education systems and lack of financial literacy education) and pay personal income taxes as long as possible even until they drop. They do this by constantly changing policies and eligibility criteria for social security, age pension, welfare payments, and superannuation or retirement savings.
Pew Research found in the U.S. that the federal government does not provide enough help for older people (65%), poor people (62%), and the middle class (61%). By contrast, nearly two-thirds (64%) say the government provides too much help for wealthy people.
The practical effect of these constant changes will undoubtedly force employees to work longer against their will. Transamerica Institute found that 51% of employees plan to continue working in retirement, either part-time (38%) or full-time (13%).
51. Employees Must Keep Working into Their 70s
The probability of each one of us living for another decade or two is remarkably high. JP Morgan found that men age sixty-five today have a 79% chance of living another ten years, while women have an 85% chance. The odds of a long life increase dramatically for couples.
In fact, couples age 65 today have an astounding 97% chance that at least one of them lives another ten years and a 90% chance that one experiences their eighty-year birthday.
According to Bloomberg, 23% of Americans with jobs said they planned on being employees and 40% of those planning to work into their 70s feel stuck in their jobs.
In Australia, The Australian reported that close to two-thirds of babies born today are expected to live to 100. As the first generation hit the century mark, more people are likely to be working into their mid-70s (or even 80s) before they retire.
