12 Reasons Which May Influences Your Retirement Decision
Some early retirement survey focused almost exclusively on men when making retirement decision. Until recently, woman may have some decisiveness which affected retirement decision for her and her husband. Recognition of the difference point of view add some complexity on making retirement decision. Off course, the retirement decision is varied beyond gender and economic issues. Substantial differences in health condition, employment market, family finance situation, and care giving responsibility can lead to the differences timing of retirement.
Bellow you will find 12 reasons which influences men and women on making retirement decision. This list are based on the survey in Health and Retirement Study , conducted by the University of Michigan. This remarkable survey often quoted in major finance and insurance institution for retirement’s reference. The sample are men and women between 51 and 61 years of age. They were interviewed and then re-interviewed again in two years interval to validate the survey result.
Retirement Incentives and Social Security Benefits
Retirement incentives and Social Security benefits are two main factors when making retirement decision. Some evidence demonstrated that 62 years old is the popular age chosen for retirement. This is due to this age is the age when workers become eligible for a retired worker’s Social Security benefits. 65 is the second popular choice for retirement age, when workers receive full retirement incentives and Social Security benefits. These effects resist whether using labor force participation as the measure of retirement. Some workers can benefit from better Social Security benefits or other pension benefits just by keeping to work past these peak retirement ages.
For women, deciding whether going forward to continue work can be complicated under Social Security rules. Women can only gain advantages from additional work if Social Security benefits based on their own work records.. It is estimated that 30 % of women will only receive retirement incentives and Social Security benefits based on their won work record. Widow or widower may receive full of deceased spouse’ benefit based on their own work record, which is higher.
Employers are progressively extending defined contribution pension plans. In this plans benefits are founded on contributions made by workers to an individual account. Defined contribution plans do not appear to have the same disincentive effects as defined benefit plans. When employee retires, benefits are calculated as the sum of all contributions plus interest, dividends, and capital gains or losses. Share of pension plan participants in defined contribution plans rose from 15 % to 45 %.To the point that defined contribution pensions continue to grow in popularity (relative to defined benefit plans), eligibility for private pensions will decrease as a factor affecting retirement decision.
Having Bridge Jobs or Part Retirement
The survey has found most workers do not enter full retirement immediately, they tend to have bridge jobs or part retirement (part time employment). This is common among workers age 65 and older workers to have part time employment. For workers in workers 55 – 64 age group, 82% working full time. Workers aged 65 have been at their current jobs less than one year as prevalence of bridge jobs. Older workers who had been at their jobs less than one year increased from 10 percent to 15 %. It is also found that 40 % women are more likely to go to part retirement than men which is only 25%. This is likely because woman are tend to work part time trough any stage of their life, hence they are more likely to be considered part retirement compared to men. This is an issue when defining part retirement in woman, because when surveyed, more women acknowledged themselves as part retirement.
Re-enter Employment Market in Later Time
More than 10 % women and 15 % men who were not working at the first interviewed were employed 2 years latter. An earliest survey using a sample of workers who began getting Social Security benefits found that about 22 % of both men and women were working when interviewed about 2 years later. These group of workers may have been part retirement when they began receiving Social Security benefits. In the same time, others may have ceased working and re-started working once again when they found a better opportunity. Another reason is when they felt they needed more income after they had stopped working.
Marital Status and Spouse Decision
Marital status and the retirement decision of a spouse can influence the timing of retirement. Earliest survey on women’s retirement focused on unmarried women and tended to find few differences between these women and men. Assuming that the husband was the primary earner, researchers expected the wife’s retirement decision to be influenced by that of her husband. Considerable research has, in fact, shown such an effect. However, women who stayed at home to raise children and then began to work later are less likely to retire when their husbands do, and married women who will become entitled to their own pensions if they continue to work are also less likely to retire when their husbands do. Some research has shown that a wife’s retirement decision affects when her husband retires.
Marital status and the retirement decision of a spouse can also determine when to retire. Assuming that the husband was the primary earner, it is expected the wife’s retirement decision to be influenced by that of her husband. Nevertheless, women who stayed at home to raise children and then began to work later are less likely to retire when their husbands do. However married women who will become entitled to their own pensions if they go forward to work are also less likely to retire when their husbands retired. It is obvious that a wife’s retirement decision is indeed affects when her husband retires.
Having Dependent Kids
It is more common nowadays that some parents have dependent kids when they reach retirement age; with the trend toward later childbearing. Some group of women have preschool children after they are in their fifties, but having school-age children is more common for these women. Parents must take into account the cost of continuing to provide for these children into adulthood while still preparing for their own retirement. Having college-age dependent children has been shown to lead to delayed retirement for both men and women.