“Ideally, you should work until you are at least 75…”

There is no one to blame for the quote except me.  I found myself saying this to a 55 year old soon to be former GE employee who is not going to move to Boston as GE departs Connecticut.  Living in Fairfield County has its benefits and one of those is that those who bought their homes a long time ago likely have some pretty good equity.  Sam, the Westport resident seeing me for Career Counseling, was one of those lucky ones. He bought his house 25 years ago.  ”Even with my current job, there is no way I could afford it now but, of course, I won’t have a job soon.”

Sam was pondering his next step.  One option was to sell his house and move to a less expensive area.  The problem was that his wife was a teacher in a nearby town and still felt very much connected to the Westport community. So, Sam was not leaving immediately. His GE pension would kick in during his early 60s and his wife – a late starting teacher – would have a smaller pension sometime in her mid-60s.  But other than the house, they did not have too much in their 401k. “I overestimated my pension benefits, underestimated college costs, timed the market incorrectly, and I confess tried to keep up with the Jones too much.” Multiple high end cars, pricey furniture, and several boats took a huge chunk out of Sam’s savings. 

Sam had to work.  When he wondered when he could retire, I showed him the “math”.  It used to surprise me that most people have not spent time understanding the nest egg one needs for retirement to generate income to live within a reasonable range of one’s current lifestyle.  That’s when I said the phrase that took him aback – “ideally, you should work until you are at least 75.” 

I explained my view about good work being life affirming.  Anyone who has ever had a job that provides satisfaction fully understands what I’m saying.  Sam was not staying at GE simply due to its move.  He didn’t mind his job and he had periods in his career where he was reasonably happy.  

It was the “math”, however, that convinced him.  He hoped to live until 95.  In good health, with good genes and a generally optimistic attitude about life, there was no reason to doubt that he’ll make it that long.  His pension plus his wife’s pension plus social security would provide a good retirement in comparison to most.  But Sam’s current next egg – hovering around $100,000 – would yield little income. He needed to build that nest egg up, most likely through selling his house, and he needed to delay dipping into it as long as possible. 

Ideally, he – and most everyone – should work until about 75.