For anybody planning on retiring in the next five years, you need to know one crucial piece of information: the landscape is much different today than it was even just twenty year ago.
Consequently, there are a few things you should know about. First, retirement today involves a variety of factors that have contributed to substantial change. Second, realize that the right time for you to retire could be vastly different from a lot of the people you know. Third, understand that all these changes will add up to a new rhythm to your life.
The best news, however, is that the opportunities to live a longer, happier, and healthier retirement life today are greater than ever before. Let’s find out why.
A Longer Retirement
Prior to the late 1990s, the word “retirement” carried some historical baggage. It conjured up a cartoon image of an elderly soul receiving their gold watch for “their long and loyal service to Acme, Inc.” Then off to the golf course or the bridge club for ten years.
And then, well… that was it.
Over the past few decades, retirement has fundamentally changed. That sullen and somewhat morose version of retirement from decades ago is inaccurate and irrelevant. Retirement today represents the next chapter in your life, and it’s not one that normally lasts for ten years.
In fact, more people are retiring today in their sixties now and living well into their nineties.
The American retirement landscape has changed dramatically, but not just in length. It’s become different due to many other factors you may not have previously given too much thought.
For better or worse, the 401(k) has largely displaced the guaranteed-income pension plan.
When you retire now tends to be an individual choice as opposed to a policy based on your age.
In addition to living longer, fthe miracles of modern medicine and physical fitness have also slowed the onset of age-related health problems to a great extent. This means more of those twenty-plus years in retirement will likely be spent in an active and healthy lifestyle.
These days, a career with a single employer is virtually unheard of. Today the average American planning for retirement will have spent only four years in any one job. This means that most recent retirees will have developed relationships from several different sources (career points), giving them an opportunity to maintain a social calendar with these people in their later years.
Last and most certainly least desirable is that ageism is still alive and well. We’ve heard many stories of successful executives being shunted to the side because they’re “old.” Sadly, the tech industry is especially guilty of this. In a profession where your knowledge must remain constant and current, if you’re past age fifty and not completely up-to-speed on advances with the last six months of the industry, you might find yourself retired, even if you didn’t want to be.
The implications of these changes extend far beyond the impact of your financial planning. Changes in work environments and life expectancy allow for greater variability in how and when people retire.
When the Time Is Right for You
Your goal is now to take all those factors into account and decide when the time is right for you to retire.
More people now partially retire. It’s no longer unusual to see some people deciding to retire in their fifties, while maintaining somewhat of an active professional presence. Many people choose to shift to freelance consulting work to complement their newly acquired free time.
In contrast, others choose to work well into their seventies. Whenever you choose to leave your career work, it’s likely that you will still be physically and mentally fit. Thus, you may want to seek demanding activities, those that require hard work and thought.
Technology-driven services have expanded opportunities in this capacity, and, in turn, the choices are numerous. Hardware and software now can make any place effectively an office. If you have a laptop with high-speed internet and a couch or chair to sit on, congratulations, you have everything you need to make money in retirement from the comfort of your own home.
Be Prepared for Profound Changes
As long as you’ve taken careful consideration into choosing your time to retire, you’re likely to experience some profoundly positive changes.
For instance, consider that you’ll no longer have to dance to anyone else’s tune. You’ll be free to choose and explore your own daily rhythms. You set your own goals, define your own performance targets, and decide what you’ll do and when you’ll do it.
Today’s retirees have control of their own time—daily, weekly, monthly, and beyond. You can pursue great adventures and whims, try new things, and rediscover forgotten pleasures. You have quality time for your partner, your family, and friends. And yes, you’ll still have enough time every day to enjoy the simpler things like walking the dog and enjoying a cup of coffee in peace.
But the transition from work to retirement can also be jarring, as the changes triggered will very likely upset your equilibrium, perhaps dramatically. These changes stem from leaving your work life’s structure, relationships, satisfactions, and support systems.
While some may resemble other challenges you’ve faced along the way, the aggregate impact of these changes can be enormous. Failure to take these changes into account is a formula for failure, so don’t underestimate them.
No Fear is Necessary
Even with so many more choices—or perhaps because of them—very few have paid enough attention to the scope and complexity of shaping and constructing the new version of retirement. Clearly, retirement today is much more than playing golf, watching TV, reading a good book in a hammock, taking long walks with grandchildren, or, as the frustrated spouse dealing with an aimless new retiree observed, rearranging the spice shelf.
Don’t let the new version of retirement scare you. In fact, it should do just the opposite. Sure, that gold watch people retired in in 1986 was nice, but the benefits of today are much better. You have more freedom, time, and opportunities than any generation before you.
For more advice on the changing American Retirement Landscape, you can find Retiring? on Amazon.