In this economy, nothing is certain. Even something that everyone counts on, like retirement, isn't the same as it used to be. Some pension plans are going kaput, and savings that were invested in the market have shrunk, leaving seniors coming to the realization that they are not going to be able to retire at the age they had planned.
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The U.S. government has slowly raised the age of retirement with full pension from 65 to 67, and France recently raised the retirement age from 60 to 62, while Germany has raised it to 67 and the EU has suggested that retirement actually start at 70! So much for the golden years. This raises the question of what the new retirement age might be by the time you retire. With increasing healthcare costs, a longer life and a depleting Social Security fund, will you have to work until you physically can't?

Social Security Worries
Due to the increased stresses on Social Security, in 1983 Congress raised the age of retirement to 67 for all of those born after 1959. There are added bonuses if you retire after you're 70, and penalties if you retire before 67. It's been a fear of many American workers that the fund they've been paying into for their entire lives will be depleted by the time they actually are able to use it. Many are worried that since the baby boomer generation is at the point of retirement, the Social Security funds will be drained – not to mention the strain it'll put on Medicare.

While Social Security will certainly be there if you are retiring in the next few years, it may start to become a problem for those that have many years left until retirement. The U.S, government will have to deal with this eventually, either by raising taxes or lowering Social Security payoffs. However, for many, the worry isn't about Social Security, but personal retirement savings. (For related reading, take a look at How Much Social Security Will You Get?)

Four in 10 Workers Agree
A recent survey of almost 9,100 workers done by Towers Watson, a global professional services company, shows that 40% of workers nearing retirement are going to be delaying their retirement plans. The Towers Watson survey shows that many of the would-be retirees are delaying because of rising healthcare costs, choosing instead to stay with a company with a healthcare plan. Nearly half of workers with poor health claimed that they will be past their planned retirement date.

Still others are blaming their retirement delay on their depleted 401(k) plans that were heavily affected by the stock market doldrums that have plagued the markets since 2007. Of those surveyed, 63% reported that they were actively paying down debt, which is nearly double the amount of the 2009 survey.

An Aging Work Force
The market crash of 2007-2008 has had lasting effects, and when coupled with aging Baby Boomers, the work force is projected to get much older in the coming years. Over the past century, up until 1990, the amount of people over 65 in the workforce fell by about 79%, but since then it has been steadily rising. According to projections from the Bureau of Labor Statistics (BLS), the work force between 65 and 74 is expected to grow by about 4 million from 2010 to 2018, and workers 75 and over are expected to grow by 0.6 million.

Falling Housing Prices
U.S. housing prices for existing single-family home have fallen nearly 25% since 2006, according to the economic department of the National Association of Home Builders. This could affect the age at which you retire, as a house is the biggest purchase you'll ever make. If you were counting on selling your home in order to move to a retirement destination, you may have to manage your expectations. A 25% cut could mean that you'll be staying in the house longer, and waiting for a market rebound, or selling it and either having less for retirement or continuing to work to make up for the house-sale shortfall.

The Bottom Line
When looking at all of these factors, it seems like a good chunk of the population will be working past the point they had planned. For younger generations, this surprise shortfall in retirement funds can serve as a warning. The best advice is to overshoot for your retirement and not put too much stock in any one investment. Relying too much on your 401(k) or other retirement funds, home value or Social Security could lead to some serious disappointment when you get to your golden years. Be sure to diversify your retirement tools so that any one of them can take up the slack while the others bounce back.

For the latest financial news, check out Water Cooler Finance: The Post-Stimulus Slump.

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