When you're making plans for retirement, you need to consider all potential sources of income. Unfortunately, many pre-retirees are making the mistake of considering a source of money they aren't likely to have: Funds from working a job.
According to recent research from Transamerica Center for Retirement Studies, 55% of current workers plan to continue working in retirement. While most of these pre-retirees think they'll work only part time, 14% say they intend to continue working in a full-time position. For some, the motivation for doing so is to stay active and healthy. But for most people, concern about having sufficient savings is driving the desire to stay in the workforce in some capacity during retirement. 
Unfortunately, this could be a big problem.
Older woman in green apron working stocking shelves.

Image source: Getty Images.

Employment can be hard to come by in retirement

Unfortunately, many people who want to work in retirement find they can't do so because of limited job opportunities. The unemployment rate for seniors is higher than for the general population and, while age discrimination is illegal, many older people still find it difficult to find work. 

Employment opportunities could also be limited by your physical health. If you develop medical problems, this could further reduce the pool of jobs you can do and make it even more difficult to maintain part-time or full-time employment. 

What should you do if you planned to work but it turns out you can't?

If you planned to work in retirement but you discover there are no jobs you can do, you need to make some swift changes to your lifestyle. 

Start by assessing the amount of income actually available to you from Social Security, retirement savings, and any pension money you have. Make sure you're calculating income from savings based on a safe withdrawal rate. This should be no more than 4% of your account balance, while some experts suggest it should be even less.

Compare the income available to you with your budget to see if there's a shortfall. If it turns out you'll have too little income without a paycheck and you can't find work, you need to make some budget cuts quickly. This could mean downsizing to a smaller home, which could help you to boost your savings account balance if you cash out home equity. You might also need to give up a car or move to an area that has a lower cost of living. 

The key is to make sure you don't draw down your retirement account balance in an effort to maintain a lifestyle you really can't afford without the paycheck you planned on having. 

Avoid setting retirement goals based on the idea you'll work as a retiree

While you may want to work as a senior, chances are very good you won't be able to. To make sure you aren't left with too little money when it turns out holding a job isn't possible, always set your retirement planning goals without the expectation of a paycheck. If it turns out working is doable, you can use the extra income to enjoy your life a little bit more.