How Long Do You Want to Work?

When we think about retirement planning, we often think about the traditional retirement age and measure the length of our expected lifetime from that point.

But the traditional retirement age may not be what we want.

When people began thinking about retirement and pensions in the late 1800s and early 1900s, working people could expect to be employed from about age 15 to age 65, some 50 years, followed by five or ten years of retirement. Now that many people are still in school till age 25 or later, a working life might be 40 years or less, followed by  a retirement of 30 years or more.

Is that what you want? Maybe not. Some other options people are exploring:

  • Lifelong work is appealing to many, including people who could afford to retire. As lifetimes lengthen and the word “passion” is used more at work than anywhere else, people choose to work as long as they feel well enough to do so. Often, people who choose this option want to change the kind of work they do, opting to invest corporate earnings in their own business or to switch from for-profit work to nonprofit work. A second career involving more risk or less stress is another popular choice. If this is what you want to do, keep in mind that your health may shorten your work life.
  • Early retirement can mean working hard in your youth to earn enough to retire when you’re still fairly young and can enjoy most of your life doing what you feel like doing. If this is your dream, a combination of wealth building and frugal living can make it a reality. It’s not likely to happen without a clear plan, and you can’t wait till you’re 55 to put that plan into action. People who go this route may be more able to spend their retirement years traveling and having adventure than those who wait until their 70s to retire.
  • Semi-retirement is a growing trend that focuses on working less and playing (or volunteering, spending time with your family, traveling, creating works of art…) more throughout your working life. This idea has been very appealing to Millennials, and it has the advantage of working out well for people who love their work and want to work forever as well as for people who want more leisure at a younger age. However, it requires careful planning and money management — and it can be thrown off course by ill health.

Whether you want a traditional retirement or you find one of these newer ideas appealing, you should talk with a financial planner. The chances of succeeding with any of these kinds of retirement increase when you plan ahead. Arrange for a free retirement consultation now.