It's common to hear people say, "I'll be working till I'm 70" or "I'll never be able to retire." I sometimes counsel clients that they might need to work part-time or on a consulting basis before stopping work entirely.
The problem of incorporating working beyond what would be considered normal retirement age into your long-range planning can be a costly one. According to the 2013 Retirement Confidence Survey, co-sponsored by the Employee Benefit Research Institute and Mathew Greenwald & Associates Inc., 47 percent of retirees last year stopped working earlier than they expected. For many, circumstances out of their control, such as health issues (for them or their spouse) or the loss of their job, were the reason. These retirees say they are not confident they will be able to pay basic living expenses, let alone medical or long-term care expenses.
The takeaway from this is that you don't want to make working longer an integral piece of your retirement plan. If, for example, a 50-year-old client has the choice of increasing his or her savings rate to make it feasible to retire at 65, or keeping the rate the same and retiring at 67, I would advise her to increase her savings rate. That is a variable that she can control. If she is lucky enough to have the ability to keep working later in life, then it will be a choice she can make, not one she has to make.