Here's Why a Late Retirement May Be a Bad Idea

When it comes to managing finances, many people struggle to keep up with expenses like rent, utilities, credit cards, and student loans. With so many obligations, saving for retirement becomes less of a priority. In fact, according to a 2016 GoBankingRates survey, one in three Americans have no retirement savings at all. (See also: 7 Retirement Planning Steps Late Starters Must Make)

If you haven't started saving yet, or your retirement account isn't enough to provide for you, you may be thinking of an alternative strategy. Many people plan on working well into their 60s or 70s rather than depending on their retirement accounts for income.

However, while many people expect to work at least part-time through their retirement, it doesn't always go according to plan.

Health issues

While you may expect to be strong and healthy well into your 70s, the reality can be quite different. Your health may deteriorate suddenly, requiring medical attention and rest. Or, you may experience an accident which limits your mobility. You may be physically unable to work, even on a part-time basis. If you relied on working into your retirement to fund your lifestyle, a health emergency can leave you destitute.

When it comes to retirement, you should save with the idea that you may not be able to work at all later in life. If you are healthy in your golden years and are able to work, that can be an added bonus which can help you pursue your passions. But it shouldn't be the focal point of your retirement strategy.

Difficulty finding work

Even if you're capable of working, finding a job when you're older isn't always easy. Unemployed workers over the age of 55 can have a difficult time finding a new job.

In addition, the modern workforce is changing dramatically and rapidly. There's new technology, and some roles are becoming outdated. Work that you may have done for years may no longer be needed, and you may be untrained to handle new ways of doing business.

You may have to go back to school or take on new training, which can be an added expense. And you might be competing against people half your age with the same skills, which can make for a challenging job search.

You become a caregiver

Even if you're healthy and your skills are in demand, you still may not be able to work. If your partner or loved one becomes ill, you may have to dedicate yourself full-time to becoming a caregiver. Your relative's needs may prevent you from going to work.

That means both of you may be unable to work, which will be a huge drain on your finances. If you did not save appropriately for the worst case scenario, you both could be in a dire situation.

Your interests may change

When you're in the early stages of your career, you may not be able to fathom the idea of not working. You may think you'd be bored. However, that can change after 30 or 40 years in the workforce. When you reach retirement age, you may realize that you just want to enjoy your golden years without the stress of going into the office. If you do not have your finances in order, that can make your retirement very difficult.

While planning to work later can be beneficial for your savings, it's not a reliable retirement strategy. Many things can change before you retire, so it's important to prioritize saving now and prepare for the different possibilities.

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