This is a financial fallacy due to several reasons:
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Health: Physical health could deteriorate with age. Despite the desire to remain employed, increasing health issues might hinder the ability to continue working.
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Employment Uncertainty: The workforce is constantly changing, and there’s no guarantee that job opportunities will always be available. Companies could restructure, downsize, or even close unexpectedly.
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Quality of Life: Working indefinitely doesn’t afford the flexibility and freedom that a funded retirement could provide. Continual employment may place undue stress on individuals and prevent them from fully enjoying their later years.
There is a fear of not having enough, a hope that hard work can solve all financial issues, and perhaps a lack of understanding about how to prepare for retirement. People often avoid confronting their financial fears and uncertainties, leading them to justification strategies like planning to work indefinitely.
The appropriate financial behaviour should involve regular, long-term savings and diversified investments for retirement. This includes taking advantage of employer-matched retirement plans, if available, making additional contributions to retirement accounts, minimizing debt, and building an emergency fund. An individual should also consider speaking with a financial advisor to develop a strategic retirement plan.
Further Readings:
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Book: “Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence” by Vicki Robin and Joe Dominguez. Book Link. This book discusses the concept of financial independence and preparing for retirement.
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Book: “The Total Money Makeover: A Proven Plan for Financial Fitness” by Dave Ramsey. Book Link. It provides common-sense advice about saving for retirement among other financial advice.
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Article: “The ‘I’ll Work Forever’ Fallacy: Why You Must Plan for Early Retirement” (https://www.businessinsider.com/plan-for-early-retirement-2013-1). This article confronts the misconception that working indefinitely is a viable retirement strategy. It discusses health, economic, and personal risks that could lead to an unexpected early retirement.
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“Saving for tomorrow, tomorrow” by Shlomo Benartzi. Ted Talk In this TED talk some common fallacies about saving are exposed and an automatic strategy to fix the system is proposed.