Employees are probably going to live longer — can they afford it?

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Our daily roundup of retirement news your clients may be thinking about.

In defense of the not-so-busy retirement
Although seniors are encouraged to lead an active lifestyle in retirement, too much activity may do more harm than good to them, writes a sociology professor for The Wall Street Journal. "One obvious downside of the busy standard is that we are creating demands that many retirees simply can’t fulfill. For reasons of health, duties to spouse or family members, or limited income, the chance for a busier-than-ever life is sometimes beyond reach," writes the expert. "It hardly seems fair that retirees, released from the obligations of work, should be expected to turn around and face burdensome work-like obligations as the path to virtue."

Your clients are probably going to live longer — can they afford it?
People are expected to have a longer life span, and this could pose a challenge in that it will require bigger nest eggs for retirement, according to this article on MarketWatch. How can clients best prepare: First, they can aacknowledge they may well have to work longer. Then they can mitigate a future cash crunch by making some lifestyle changes now, such as saving aggressively and spending less. “The sooner you develop the habit of spending less the stronger this habit will become. Spending less is probably the single best way to stretch your retirement assets,” says an expert.

How to live it up without going broke before you die
A study by the Employee Benefit Research Institute has found that many retirees who have built a sizeable nest egg are not keen on spending away the savings they amassed for years, according to this article from the Washington Post. “Within the first 18 years of retirement, individuals with less than $200,000 in non-housing assets immediately before retirement had spent down (at the median) about one-quarter of their assets; those with between $200,000 and $500,000 immediately before retirement had spent down 27.2%,” the study found. “Retirees with at least $500,000 immediately before retirement had spent down only 11.8% within the first 20 years of retirement at the median.”

What happens if you try retirement and decide it's not for you?
An expert says that many seniors decided to return to work after retiring for some time, according to this video and transcript on personal finance website Motley Fool. While many of them made the decision because of financial reasons, others opted to go back to work to gain a sense of purpose, become socially engaged and become active, says the expert. "And because we're living longer … it's pretty reasonable for people to work into their 70s."

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