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Let’s Not Plan for Retirement, Let’s Plan for What’s Next

There’s a lot of advice about saving for “retirement,” but many people approaching age 65 don’t want the traditional retirement their parents and grandparents had. Instead of filling their days with golf, bridge, and daytime TV, people in their 50’s and early 60’s plan to continue working after they reach “retirement age.” 

That might mean continuing in a current position, switching to a more rewarding career, volunteering, or taking a part-time job. Some people become consultants, while others start their own businesses after “retiring” from a full-time job. 

These up and coming retirees are the youngest of the Baby Boomers—the generation that brought us rock n’ roll, the Vietnam War protests, and the women’s movement.  

It’s not surprising that these Boomers are charting new territory in their retirement years as well. For them, retirement is a transition, not a permanent departure from full-time work. 

More Seniors are Choosing the Workforce 

This change in attitudes toward retirement isn’t just about the Baby Boomers’ rebellious streak. There are real socioeconomic factors at work too.  

People are living longer. Today’s 65-year-olds can expect to live about five years longer than their great-grandparents who turned 65 in 1940.

That’s five more years of “retirement” to finance. In addition to ordinary living expenses, today’s retirees face skyrocketing health care and long-term care costs.  

Paying for a long retirement isn’t as easy for younger Boomers as it was for their parents or grandparents. In prior generations, most people who retired received pensions. But most workers today don’t have pensions—it’s up to them to save for their retirement years.  

And many haven’t saved enough. A recent study by Northwestern Mutual found that 17 percent of Baby Boomers had less than $5000 saved for retirement. In addition, some people who took a big hit during the financial crisis a decade ago have yet to fully recover.  

Many People Feel they just can’t Afford to Retire. 

Even the government encourages people to work longer—the “full retirement” age for Social Security is gradually going up until it hits age 67 for people born in 1960 or later. 

And researchers are questioning the very notion of retirement. Some studies have shown that people who leave the workplace entirely may have shorter lifespans as they lose self-esteem and daily interaction that comes from working. 

Planning for a Working Retirement 

If you plan to keep working after age 65, retirement can seem far away. Because you’re healthy and employed now, it’s easy to imagine yourself bringing home a paycheck in your 70s and even 80s.  

It’s tempting to avoid planning and saving. But it’s a risky strategy because in many cases, you won’t get to choose when you retire.  

For one thing, it’s not always possible to work through your 60’s and 70’s, no matter how much you might want to continue working. Mandatory retirement is illegal in most professions, but people do lose their jobs because of age discrimination—even though that’s against the law too.  

Health issues can make it impossible to continue working in your current profession. Layoffs happen. You may stop working to take care of a sick spouse or frail, elderly parents. And it can be hard to return to the workforce as an older employee.  

Goals and desires may change too. In your early 50s, you may envision continuing in your career for the rest of your life. But as you approach your mid-60s, your priorities might be different.  

You may long for a more satisfying type of work, or more time to pursue hobbies, volunteer, start a business, hang out with the grandchildren, or travel.  

All of this makes it critical to plan for the time when you won’t be working, or you’ll be working less, or at a lower rate of pay. For example, it’s never too late to start contributing to your employer’s 401k plan.  

Downsizing to a smaller, less expensive house can give you cash to jumpstart your retirement fund. Even a second job can help boost your savings. 

If you have saved enough for “retirement,” you’ll still be able to work after you turn 65. But you won’t have to work just to keep yourself afloat financially.  

You’ll have the freedom to choose, whether that means working full-time, part-time, as a volunteer, or as an independent business owner.  

How Medicare Helps – Whether You’re Working or Not 

Once you turn 65, you become eligible for Medicare—and this can be very freeing for people who plan to keep working through their late 60s, 70s and beyond.  

With Medicare coverage, you don’t need to be tethered to a full-time job to have affordable health insurance. Nor do you have to be retired and collecting Social Security.  

This makes it easier to have choices once you’re 65—whether that means working part-time or starting your own business. 

Baby Boomers have been a dynamic generation. It will be interesting to see how they reshape the face of retirement.