Re-Thinking Your Nest Egg

Economic uncertainty and the rough waters of the recession haven't been kind to any of us - especially as we've watched our retirement savings dwindle.

In a recent New York Times article on the impact of the recession on planning for retirement, reporter Steven Greenhouse summed up the way many feel: "This wasn't the way it was supposed to be."

No one would argue with that. Unfortunately, smaller nest eggs are the new normal. And costs for all of us are going up. That's why it continues to be important for younger generations to start saving as much and as early as possible. Folks who are 50+ also need to amp up their savings (some tax advantages for ' catch-up' contributions may help).

No matter where you start, it's important to consider the factors that go into how much money you'll need to retire. As noted in the New York Times article, tools like the 'highly recommended' AARP retirement calculator can help. It's free and available to anyone, regardless of age. 

Also free is a Social Security calculator, which you can use to gauge what your monthly payment would look like if you claimed at 62, 65, or 70 (or anywhere in between). Waiting can make a huge difference to your retirement bottom line. "Every year you work is in essence a twofer," says AARP Legislative Policy Director David Certner.

So, you've used the calculators and crunched some numbers. Perhaps you've decided to that delaying retirement and working longer makes sense...reluctantly. Some experts say there's a different way to think of it.

What if working longer meant more fun, not less, and a bigger nest egg, too? "It's important to remember that just because you're delaying retirement doesn't mean you have to delay enjoyment," says Senior Financial Planner Christine Falund of T. Rowe Price. Many workers seem to agree with her.

For others, the job market may not be entirely cooperative. Recent government unemployment figures appear to be holding steady, at 8.3 percent - higher than anyone would like. Unemployment for the 55+ workforce was unchanged last month, at 5.9 percent for January and February.

However, older workers continue to remain unemployed longer than their younger counterparts, and age discrimination remains a problem. The good news is that more organizations than before are realizing the benefits of hiring older workers.* Let's all hope that continues. Many of us could use more eggs for our nests.

Question for our readers: What are you doing to re-think your nest egg and how you're planning for retirement -- or stretching your savings if you've already retired ? Comment below.

*Are you 50+ and looking for a job? Or considering becoming your own boss? AARP has information and resources to help older workers find jobs, whether you're looking for full-time or part-time work. Find free information and tools at www.aarp.org/work, including job-hunting resources, winners of AARP's Best Employers for Workers Over 50 Awards and this list   of employers who value older workers.  

Photo courtesy of msSeason via Flickr Creative Commons.