Why Save For Retirement If You Don’t Plan On Retiring
In meetings with families, it is much less common for me to hear about walking away from their job for a life of golf, TV, and bridge games. More often, the conversation steers toward working with a non-profit, consulting part-time, teaching, or even starting a business around a passion or hobby. The idea of phasing into retirement with a reduced or modified work schedule also appeals for several reasons.
Yes, Baby Boomers are taking the term “retirement” and making it their own. How can you get and stay motivated to save much for the future if you envision yourself with some sort of income until the day you die? Simply put, because life happens. What does that mean?
You may be unemployed. Around 70% of employed Americans plan to work beyond age 65, but only 28% of current retirees actually did. They were no longer working due to factors beyond their control – health problems, layoffs, or family obligations.
- Plans change. Think back 10-20 years ago. Did you have a clear picture of what life would be like today? (if you did, contact me – I could use a good Oracle). You may decide that you want something completely different to fill your remaining years, and that may take more money than you thought.
- The power of “walk away freedom”. You could call it “financial independence” or “financial freedom”, but they all refer to the day when you no longer work because you need the paycheck. If you become fed up with work, you have the luxury of walking away and still maintaining the lifestyle you desire for your remaining years.
Now close your eyes again. Envision having enough money set aside to support your family even if you cannot work anymore, to give you the flexibility to change your mind, and to give you the power to choose to work or not.
THAT is why you should get started on a solid path, regardless of your age! This is what I want to work toward with my clients.
So what can you do?
Get a solid idea of the expenses you anticipate in the future (and taking 80% of your current income does not count). I wrote a couple of posts regarding retirement expense myths and expenses you may not think about.
- Research what kinds of opportunities exist for a retirement career. Check out Encore Careers (encore.org), Your Encore (www.yourencore.com), and Retirement Jobs (www.retirementjobs.com) to see what types of work you might enjoy.
- Consider working with a Certified Financial Planner®. Creating income in retirement is a complex problem, but there are also many opportunities to reduce investment expenses while remaining conservative. You can read more about what to look for in an adviser here as well as the CFP® Board’s “Let’s Make a Plan” site.
Who do you know that might enjoy re-framing their mindset on saving for the future? Be sure to share this with them!
Elliott Weir, MBA, CFP® has been working with families to help them navigate retirement since 2004. He started III Financial in 2012 to focus on helping address the financial realities faced by people over age 50, without the sale of products or the large asset fees of money managers. He is also the editor for the Society of Financial Service Professionals “Retirement Counseling” newsletter.
Elliott earned his MBA in 2002 through the McCombs School of Business (University of Texas at Austin). He enjoys watching the US National soccer team, tinkering with technology alongside his son Travis, keeping up with his son Tyler, and going to see movies with his wife of 17 years, Carrie.
For more, please read his full bio.
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