If you were born in 1960 or later, you'll have to wait until age 67 to get your full retirement benefit from Social Security -- based on the rules as they stand today. If you love what you do, are capable of continuing it, and your employer still finds the work you deliver valuable, then more power to you. However, counting on keeping your job until 67 carries risks -- risks you must consider when making long-term plans.
What Could Go Wrong?
The chart below shows the labor force participation rate in 2012 (the most recent data available), based on data from the Bureau of Labor Statistics. It essentially shows the percentage of people in each age bracket actively working or looking for work . As you can see, the participation rate starts dropping after around the mid-40s, with significant declines starting around 55. It drops below 50 percent for 62 to 64, and in the 65 to 69 age bracket, the participation rate had fallen to 32.1 percent.
A major risk to your plan is that you might wind up disabled. The charts below come from the U.S. Congressional Budget Office and show disabled workers as a percentage of the overall population, by gender and age group. Age 60-64 is represented by the red line; note how it's substantially higher than most of the others. Indeed, it's only beaten by the purple dots, which represent the disability rate for those ages 65 and up who haven't yet reached their full Social Security retirement age.
Even if your mental and physical health hold up, there's no guarantee that your employer will be around until you reach your planned retirement age, nor that the company will need your services if it does. Look around your office and estimate the ages of your co-workers. How many are in their late 50s or 60s? Of those who are, how many are doing the type of work you're doing now, or have a decent shot of being able to?
In addition, once you hit your 50s, it starts to get more difficult to find a new job that pays well and provides meaningful work. Oh sure, if you're a proven executive with incredibly strong leadership skills, you may be able to land on your feet at any age, but for the rest of us, a longresume may start becoming a liability.
What Can You Do?
If there's any risk that you won't be in your current job until you're ready to retire, the first and most important thing you can do is to save and invest as though your retirement date will come well before you reach 67. Even if you intend to keep working, money brings flexibility, including the flexibility to either retire early on your terms or to survive and thrive in a lower-paying job, should you lose the job you're in.
On top of that, with a strong enough personal financial position, you can buy yourself a job by starting or investing in a small business that needs both capital and leadership, or by buying a franchise. If you want and are able to work until age 67 (or beyond), charting your own course like that may provide you better opportunities than hunting for traditional jobs when you're in your 50s and 60s. But you'll need to have capital to work with.
On the positive side, the experience and reputation that come with age will always matter for some jobs. For instance, nonprofits often need help and love the reliability, trustworthiness and solid reputation that often come along with gray hair (or no hair). A good reputation means a lot to a charity, and that's one characteristic you ought to be able to play up in your 50s and beyond.
Chuck Saletta is a Motley Fool contributor.