What Are the New Rules of Retirement? 10 Guidelines for Financial Security

5. The New Retirement Age – Work Past the Traditional Retirement Age

Long retirements are a relatively new phenomenon. For most of our history, people either worked until they died or until they physically could not labor any longer. In fact, According to the Bureau of Labor Statistics, there has been an incredibly steep decline of men 65 and over participating in the labor force:

  • In 1880 78 percent of men over the age of 65 were working.
  • In 2000 only 17.5 percent of men over the age of 65 were working.

While a NEW Retirement still stands for relaxed golden years, you may find that it is necessary to reconsider your own retirement target date or go back to work if you have already retired. The good news? Working tends to keep you young, engaged and both physically and fiscally fit. There are so many benefits to working.

6. Utilize Your Home Equity

From the 1990s through the 2000s, housing prices rose dramatically. If you owned a house near the beginning of this run up – like many baby boomers – your home equity probably grew tremendously. This housing price appreciation is helping many baby boomers to make retirement viable.

Home equity represents the biggest source of wealth for most households in or nearing retirement. This equity can – in some cases – make up for a lack of savings in your financial profile. To use home equity for retirement expenses, retirees often consider downsizing, cash out refinancing and getting a reverse mortgage — either now or at some point in the future.

However, retirees need to consider carefully how and when they tap their equity. In a NEW Retirement, retirees use their home equity to help make retirement work, but they do so carefully.  When thinking about how to tap into home equity for retirement, strive for the following:

  • Be holistic and comprehensive – Look at all of your resources and goals and include home equity as part of a larger financial view.
  • Promote flexibility – Your plan needs to meet both your long and short-term retirement goals.
  • Be prepared for future changes – Financial, health and family needs and risks change as people grow older – your home and home equity should be part of the equation.
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