Unhappy at work? Here’s how it could impact your retirement
Although work is pretty much a part of adult life, some of us seemingly like our jobs less than others. In fact, it may surprise you to learn that, according to a report by the Conference Board, a New York-based nonprofit research group, more than half of Americans are actively unhappy at work.
This hasn’t always been the case, however. In 1987, over 60% of workers said they liked their jobs. But that number has fallen dramatically since then, and it hit an all-time low in 2010, shortly after the Great Recession, when only about 42% of adults felt satisfied at work. Although this percentage has increased in recent years, the end result is that there are more people who are unhappy at work than the other way around.
Here is the problem, however. While younger workers who don’t like their jobs are usually going to hold them, well, make sure they have this little thing called money coming in, older workers may be less motivated to keep plugging in. A study published in the Journal of Occupational and Environmental Medicine found that, while poor health is the main factor pushing older workers to retire early, job dissatisfaction is a moderate second factor.
It wouldn’t be so bad if today’s near retirees were better equipped to end their careers prematurely. But the majority of older Americans are simply not financially prepared for retirement. In fact, the median amount of savings among baby boomers aged 56 to 61 is only $ 17,000, and an estimated 41% of baby boomers have no retirement savings. Since the typical elderly person cannot to afford leaving the workforce earlier, the fact that so many people falter only exacerbates our pension crisis.
Early retirement has consequences
Let’s be clear on one thing: if you’ve saved well throughout your career and find yourself miserable at work towards the end, then there really is no reason to prolong your misery. But if you are among the majority of Americans who are ill-prepared for retirement, stopping your career earlier than expected could jeopardize your long-term financial security.
For a large number of workers, taking early retirement means claiming Social Security as soon as they are able. And although you can benefit from these benefits from the age of 62, apply for social security before reaching full retirement age – which for today’s older workers is 66, 67 or somewhere in between – will result in a permanent reduction in payments.
The average Social Security recipient currently receives an income of about $ 1,360 per month. If you qualify for this amount at full retirement age, but you apply for benefits four years earlier because you hate your job and can’t stand doing it another day, you will reduce your benefits. monthly payments at $ 1,020 per month – for life.
Now, if you’ve got a fair amount of savings and are using Social Security as just a supplement, then cutting back on those benefits might not seem so bad. But with 65% of today’s seniors rely on Social Security to provide most of their retirement income, quitting your job earlier than expected and claiming benefits sooner could be one of the worst decisions. that you can take.
Another problem with succumbing to job dissatisfaction is losing some key years to fill your nest egg. Currently, workers 50 and over can contribute up to $ 6,500 per year to an IRA and $ 24,000 per year to a 401 (k). Let’s be optimistic and assume that you are able to maximize the latter option with your current salary. If your plan is to do this for another four years, only you end up retiring early because you can’t stand your job anymore, you’ll end up with almost $ 100,000. less in your nest egg from the start. And it’s probably not an amount you can afford to lose.
Finding a happy medium
Staying in a job that makes you miserable is hard enough when you’re younger, but sticking out when you’re older – and perhaps, a lot less patient – is another story. But before handing in your resignation, consider alternatives to this extreme.
You can, for example, talk to your manager of Why you are not satisfied and see if anything can be done to address your concerns. If the problem is that you are under too much pressure or have too much to do, your manager may be willing to step in and redistribute some of your workload. Likewise, if you are senselessly bored at work and haven’t felt energized in months, you might ask to move on to another team or be part of a project that you find more fulfilling.
If your employment situation is truly not recoverable, but you are not financially prepared to stop it, then it is worth exploring other arrangements that allow you to stay in the job market longer. job. It could mean finding a new job, moving to a part-time status, or starting your own business. Leaving your job earlier than planned could put you in serious cash shortage, so think carefully about the repercussions before you take the plunge.