August Retirement in SightSubmitted by Kaizen Financial Advisors, LLC on August 30th, 2019
THINKING ABOUT LEAVING WORK A LITTLE EARLY?
The so-called “FIRE” movement (FIRE stands for financial independence, retire early) has garnered much attention lately, even those who anticipate retiring in their sixties are wondering if they should make a sacrifice or two to exit their careers or businesses a bit earlier. A poll, commissioned by personal finance website FinanceBuzz, highlights what some pre-retirees would be willing to give up, so they could do just that – at least, in theory.
Thirty-six percent of the poll respondents indicated that they would cut household spending to the bone and buy only the most-essential consumer goods for as long as two years if it would hasten their retirement. Twelve percent said that they would refrain from starting a family if being child free would help them retire earlier, and 11% would avoid having a pet. Six percent said that they would live without a vehicle if that would contribute to their ability to retire sooner. Are measures like these really necessary? Perhaps not, for there are other ways to potentially arrange an earlier entry into retirement. A part-time business could be built from a hobby, pastime, or passion, and the income derived from such a business could possibly help your retirement savings grow. Also, living below your means during your working years can free up more cash which can be directed into retirement savings, which may help you reach your savings goals earlier in life.1
MORE SENIORS, BUT PERHAPS FEWER DOCTORS
Ideally, the ranks of primary care physicians and specialists would expand to meet the demands posed by retiring baby boomers on the health care system. In reality, things are quite the opposite: America is facing an oncoming doctor shortage.
According to the Association of American Medical Colleges (AAMC), there could be between 47,000-122,000 fewer doctors in the U.S. by the year 2032. One of the biggest problems is that doctors are growing older, themselves: a third of all currently licensed U.S. physicians are set to celebrate their 65th birthdays during the 2020s. It should be noted, however, that the number of physician assistants (PAs) and advanced practice registered nurses (APRNs) is forecast to keep growing. The communities hit hardest by this shortage will likely be rural, with a history of being underserved by health care providers. A new bill, H.R. 1763, has been introduced in Congress to try and boost Medicare funding, so that 3,000 new residency positions may be added annually at teaching hospitals during 2020 to 2024.2
ON THE BRIGHT SIDE
Eighty-one percent of retirees responding to the University of Michigan’s most-recent, federally funded Health and Retirement Study (2016) said that their quality of life in retirement was either as good or better than in their working years. That compares to 65% in 1992.4
If you or someone you know is thinking about retirement, please reach out to a Kaizen Advisor. We can help you plan for your future including retirement income and healthcare planning.
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1 - fool.com/retirement/2019/07/22/to-retire-early-what-would-you-give-up.aspx [7/22/19]
2 - news.aamc.org/press-releases/article/2019-workforce-projections-update/ [4/23/19]
3 - usgs.gov/special-topic/water-science-school/science/how-much-does-a-cloud-weigh?qt-science_center_objects=0#qt-science_center_objects [7/23/19]
4 - marketwatch.com/story/fears-of-a-retirement-crisis-are-overblown-and-these-numbers-prove-it-2019-07-17 [7/21/19]