Perhaps in our grandparents generation, retirement looked like quitting your job or selling your business, then having a retirement party before proceeding to a new phase. That phase consisted of watching TV, yardwork, travelling to visit friends and generally being helpful to the extended family. In the generation of clients that I’m working with now, there are as many individuals approaching retirement as I have clients. I’ll share a few of their stories to spur your imagination about your own possible vision for retiring.
Many of my clients and friends may use the word “retire” when what they really mean is transitioning into a new phase of work/family/interest balance. For example, a friend of mine (let’s call him Stanley) in his early 50s wants to quit his long commute tech job and begin doing technology consulting predominantly from home. Stanley’s financial plan includes making sure that the resources already in place allow him to consult without worrying whether it will be very lucrative; since success is not assured. Having a plan B in place is especially important because he could be retired for perhaps 40 years.
A doctor client in her mid-50s has been saving assertively throughout her working life. Her goal is to be able to retire young. She was able to “retire” from the hospital where she worked knowing she had enough retirement income in place to support her lifetime spending plan. Now she works about four days a month as a visiting doctor to other hospitals who need coverage when their own take vacation or go on leave. As she is still quite young by traditional retirement standards, this gives her freedom over her schedule and a chance to stay involved in medicine.
Some of my clients are simply frustrated with the persistent “do more with less” attitude of their employers. Several have quit their jobs, spending six to nine months on their household backlog list (I call it the honey-do list) and then take part-time jobs in completely different industries or start a small business. They do this as a way to try and supplement their retirement income yet expel previous sources of frustration.
Many business owners no longer have the retirement mentality of “sell the business and walk away.” Their slowdown plan involves making sure that there are the right set of competent employees to operate the helm while they go on vacation, travel, or take time away to help family members. Some plan their slowdown according to the seasons, so they can enjoy the warm weather in January at Florida.
Employees leaving their W-2 income jobs, often choose the new world of starting their own business. Sometimes out of supplemental income necessity, but frequently because it will possibly give them more freedom. They may be able to set their own schedule, pursue marketable ideas that interest them and enjoy some of the tax benefits that go with being self-employed.
Whether your retirement dream is to quit your job, slow down gradually, begin pursuit of long seeded interests or just take more vacations; you’ll most likely want an individualized plan. Talking with a financial planning professional may help structure lifelong layers of income. Pensions, Social Security income, investment income, and even continued earnings from some type of work can be blended together for what could be decades of retirement. According to the Society of Actuaries, a 65-year-old man has a 41 percent chance of living to age 85 and a 20 percent chance of living to age 90. A 65-year-old woman has a 53 percent chance of living to age 85 and a 32 percent chance of living to age 90. That’s a long time for yardwork, TV and golf.
Merra Lee Moffitt, CERTIFIED FINANCIAL PLANNER™ Professional (CFP®), is a Senior Partner, Wealth Strategist at Good Life Financial Group. She loves helping business owners grow their financial independence via their businesses. She helps her clients keep work/family balance while they pursue lifetime financial success. She can be reached at, 610.488.7353 or by email at firstname.lastname@example.org. Also check out www.MerraLee.net. Oh, by the way we’ve grown and now have moved to 2395 Lancaster Pike, Reading, PA 19607.