What our parents considered “old” will be “midlife” for us – with an opportunity to explore a new career instead of just retiring.
They say 50 is the new 30. We’re healthier, more fit, and look better than any cohort in history – with the possible exception of the mythical inhabitants of Shangri-la, who never aged. Whether because of diet, exercise, Botox or the surgeon’s knife, we’re looking good. Absent are the traditional signifiers of aging – thickening middles, thinning hair, flabby abs. We’re just as energetic and youthful as we were 10 years ago, but we’re a lot smarter, we make a lot more money, and we can afford to live our youthful dreams. A Porsche, a weekend in Paris, a carbon-fiber road bike – no problem.
But as we spend time living the life we were born to live, there’s a tiny little cloud that sometimes appears on our mental horizon. Call it the R word – retirement. Yes, we’ll be 65 someday, a number that our parents considered a milestone because it meant time to stop working and start living on whatever assets they had managed to accumulate during their lifetimes, plus Social Security, plus pension (if any).
But these days, 65 is no longer the age when we have to pack it in, get the gold watch, move to the dreaded retirement community and spend our remaining years playing golf, vegetating and complaining about those ignorant, ungrateful whippersnappers who’ve taken over the world. There’s an alternative to the all-or-nothing concept of work. In fact, many people are deferring retirement, at least in the traditional sense. They may not be working full time, or involved in their former profession, but they’re not working as Wal-Mart greeters either. They’re busy creating a new work model, one which will, experts suggest, dominate the workplace for decades to come.
In this new paradigm you don’t just retire. Nor do you work full time. Instead, you consult for defined projects in your field, run a seasonal business, cater parties, do freelance editing, open a pet boutique – whatever strikes your fancy – not only because it interests you, but because it provides positive cash flow that sustains your retirement savings over your longer life span.
Trading up for the new, improved model
It’s not that you have to keep working at that same job for an extra 10 years or so, it’s that you’ll have an opportunity to try something you’ve always dreamed of doing. There are millions of folks now aged 35 to 55 who will help create a labor force, one that uses the energy and talents of people who, because of a lifetime of healthy habits, will enjoy longer, more productive lives.
In her book, Retire Retirement: Career Strategies for the Boomer Generation, Tamara Erickson describes this new world, which, she says, will radically change the workplace. While Erickson admits that companies are now shedding older workers via buyouts, and replacing them with younger (and cheaper) employees, she suggests that things are already changing.
“The reality is that talent will be in short supply, so workers should be able to do whatever they want to do,” Erickson writes. She suggests that we need to continually consider future work possibilities that fall outside the arc of our careers. She states, “As you go through the process of making change in real time, it helps to know yourself well, to be sufficiently in touch with your desires and preferences that you’ll be able to recognize appropriate and appealing opportunities for you as they unfold.”
Bottom line: Don’t assume that once you reach 65, you have to retire. Expect, rather, that your life will expand, not contract. Expect to encounter new opportunities and new challenges. Expect to live a varied, unpredictable and interesting life as you age. Expect that you’ll still be healthy, mentally acute and powerfully engaged in the working world – in other words, still a player.
The idea is to have fun working on your terms, not be a wage slave. You’ll still need to have a retirement savings plan in place. That means setting aside money today, even if you won’t need it for decades. It’s imperative to have a simple, conservative plan for asset accumulation and stick to it. But keep in mind what you might want to do when you “grow up” – think about that dream business you never got around to trying because you were too busy climbing the corporate ladder.
At 60-something, Tom Hoff may be a retired L.A. cop, but he’s never considered retirement. He started his own business – and he loves it. “I do polygraphs,” Hoff says, “and it pays well. I like doing it, I know how to do it, I make my own hours – and on nice days I’m on my Harley, or off to Baja or climbing – life is good!”
But don’t expect that you’ll be like Jack Weil, the owner and founder of Rockmount Western Wear in Denver, Colorado. Jack was way past retirement age, but he still went joyfully to work every day, waited on customers, and made sure that things ran smoothly until he passed away at the age of 107.
Get some good advice
We all know the drill: Choose balanced, no-load mutual funds; direct automatic deposits into said funds from your 401K and your taxable accounts; and watch your money grow. In reality, it’s not so simple. That’s why you may need to consult a financial planner, who can take a coldly realistic, unbiased look at your financial situation and give you some options
Any such adviser ought to be fee-based; that is, he or she ought not to be selling any financial product.
A stockbroker will want to sell you stock, an insurance broker will suggest insurance, and so forth. They may not charge you directly for their advice, but you’ll pay anyway, by paying commissions on the products they’re peddling. But a fee-based adviser, like a lawyer, charges only for his/her time.
A financial adviser will, before you consult with them, ask you to fill out an extensive questionnaire. They can help, but not perform miracles. One adviser told us about a client, aged 62, with an annual income of $350,000, and a net worth of less than $50,000, who wanted to retire in comfort in three years. “I told him that the lottery might be his best bet.”
There are several online tools that will help you get started. Many of these provide a simple web-based program that automatically calculates the state of your investments over time, according to the data you enter – yearly contributions to taxable and tax-deferred accounts, beginning balance, expected return on investment, etc. It’s a quick and helpful way to determine whether your assumptions are realistic.
All the advisers we spoke to agreed on one thing: Limit your risk. Retirement investments need to be oriented toward both growth and capital preservation. That’s why it’s important to have a diversified, continuously rebalanced portfolio that’s relatively immune to the wilder gyrations of securities markets. Hedge-fund investors can afford to lose a few million chasing outsized gains – but you can’t.
Copyright © John Hazlehurst / 2015 Singular Communications, LLC.