What does “retirement” really mean today? In my experience, it’s much different for people retiring today than it was 20 years ago.
In the “old” days, people retired and then lived a life of leisure. Very few people went back to work unless they had to. Today, one of the biggest trends in retirement is that there’s an increasing percentage of people who work in retirement. A recent article in the New York Times highlighted this “work in retirement” trend.
- Between 2000 and 2016, the percentage of people age 65 or older who work in retirement rose from 12.8% to 18.8%--roughly a 50% increase.
- Among 65- to 69-year olds, close to a third now work.
- Among 70- to 74-year olds, about a fifth now work.
- In the 75-plus population, the proportion still working increased to 8.4 percent from 5.4 percent in 2000.
Some of these people work in retirement because they need the money to live a reasonable retirement. But even when you exclude those people, there’s a clear trend of people working not because they have to, but because they want to.
Now, before you get depressed thinking that your golden years might involve work, let me give you my definition of work. It comes from my colleague Mitch Anthony (who was a guest on an earlier podcast). Mitch defines work as, “An engagement that brings value to others and meaning to you.” Notice how that definition says nothing about getting paid for your work.
Work In Retirement
I’ve seen it over and over that the people who are happiest in retirement have a reason to get up in the morning that goes beyond a life of leisure. Sure, traveling, playing golf or bridge, or other leisure activities are fun and well-deserved. But there is a law of diminishing returns when it comes to leisure.
Just like we know there’s light because we have the contrast of darkness, some level of “work” engagement can be the contrast that enables us to appreciate and enjoy our leisure even more.
In working with our clients who are thinking about retirement, we’ve found three questions help frame the conversation.
- Do you have enough money to retire?
- Have you “had enough” of working at your current job?
- Do you have something to retire to?
We can help you answer questions one and three. Question two, whether you’ve “had enough” of your current job, is a question only you can answer.
Something To Retire To
I want to zero in on question three—do you have something to retire to. This is a conversation we have with our clients, ideally, several years before they actually retire.
Here are a few things our clients retire to.
- A period of no work that could last from a few months to a couple years while they decompress and enjoy their new freedom.
- A part-time or full-time “fun” job that may or may not relate to their original career.
- Deep engagement in either a new or old hobby that they now have time to pursue.
- Volunteer work that brings meaning and social engagement.
- A cyclical period of moving in and out of work with periods of rest and relaxation in between.
- A life of rest and relaxation, traveling, and visiting family.
Ultimately, each person’s idea of the ideal retirement is a little bit different. And, what you thought was your ideal retirement may change over time as you actually experience retirement.
The key to succeeding in retirement is to have regular conversations with your spouse and, to an extent, with your financial advisor, about what your ideal retirement would look like.
On the surface, that sounds very neat and tidy. Unfortunately, research has shown humans are not very good at predicting what will make them happy. Knowing that, our advice is, make a plan, start living that plan, and if it’s not working the way you thought, then adjust!
It may take several tries before you settle into a retirement rhythm that works for you.
As a financial advisor, we work with our clients to build a retirement plan that meets both your financial goals and your life goals. And, since life doesn’t always go as planned, we keep the dialogue open and help you make adjustments along the way.
Give Us a Call
If you’d like to have a retirement conversation, please give our office a call at (913) 624-1841 or send me an email at firstname.lastname@example.org.
We are here to help you.
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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