You’re Planning to Retire. What Comes Next?
The idea of retirement at age 65 is an entrenched one. It’s the age many of our grandparents retired. The idea was to save enough money to live one’s golden years in comfort. In 2022, however, people are living longer, and the golden years may be lasting for decades instead of years. Increasingly, people are choosing not to retire at 65 because they don’t want to give up working. Some financial services experts are calling this stage of life “unretirement.”
Retirement is About More Than Leaving a Job
One recent column by Richard Eisenberg explains that many people define “retirement” as the day they leave a long-term job. But few people have a defined concept about what comes next.
“So many of us spend lots of time thinking about what we want to retire from—grueling jobs, annoying bosses, interminable meetings (lately virtually) and a gnawing feeling of unfulfillment,” wrote Eisenberg. “But we rarely give much thought to what we’ll want to do with our free time in retirement.”
Perhaps it has always been a goal of yours to volunteer. But where will you volunteer, and how much time will you spend doing it? Others may be looking to change the kind of work they do, from full-time to part-time, for example, or to another industry entirely. Some people who are accustomed to staying busy may decide to offer services on a freelance basis, giving them fulfilling work with a less rigid schedule. In any case, it’s important to plan for your “unretirement.”
How Much “Unretiring” Can You Afford?
If you plan to take on paying work after your retirement, it’s important to understand how much work you’re prepared to do, and what the state of your finances are. If you plan to volunteer, you may be transitioning entirely to your retirement savings. Depending on what type of post-retirement activity you plan to do, it’s important to have a good idea of when you will begin drawing social security benefits. In general, the longer you wait to draw your benefits, the higher they will be. Typically, your benefits will increase eight percent per year for each year you postpone claiming them after full retirement age, until 70.
But determining all these magic numbers takes careful analysis and planning. Eisenberg recommends that you draw up a rough budget for your early years of unretirement and compare it with the income you’ll be receiving and withdrawals you might make from your retirement savings. If you have a financial advisor, set up a meeting with that person to discuss your ability to unretire. If you don’t have an advisor, now is the time to find one.
Seek Expert Financial Planning Advice
Good retirement planning should consider your plans for the day you leave your long-time job. It should also consider your health, your spouse’s plans, your assets, and unforeseen circumstances such as inflation. Make sure you’re addressing all aspects of your unretirement. The end result is an evolving plan that helps you feel confident about your plans for the future.
Need help with retirement planning? Contact Prime Wealth Advisors today!