For the American worker, the dream of a comfortable and simple retirement after a long career in one place is receding into the rear-view mirror.
Boomers are learning the traditional path to retirement is being replaced by a complex and meandering journey that requires more work, varying choices, and additional planning.
You know the obstacles: Health-care costs and living expenses continue to outpace earnings, so more retirement-age workers are clocking in than ever before.
Fewer workers have pensions to rely on, and Americans have less money saved than they should. And the complexity and stress of trying to navigate retirement means many folks avoid planning ahead at all.
For many, retirement isn’t an option — and plenty of Americans aren’t interested in fully retiring anyway. Here are some options for folks looking for ways to dial back work while continuing to earn and engage.
1. Phased retirement
This option involves negotiating fewer hours of work via a shortened week, month, or year. Not all employers are amenable to it and not all jobs lend themselves to it, but opening more room in your schedule can be a great way to downshift from full-time work to something less intense.
2. Consulting in an area in which you have expertise
Do you have a wealth of knowledge and experience in a particular field? Are you an accomplished fundraiser? Can you organize and maintain a budget? Do you have tons of experience motivating and supervising a diverse staff?
Put your skills to use by consulting with companies or individuals who can benefit from what you know and are willing to pay you for it.
3. Taking a part-time job
Whether you are looking to leave a long-time job or have been forced to leave due to layoffs, part-time work is a good way to lessen the financial blow while trying something new and hopefully less stressful.
Aim for something a little different and a lot more flexible.
4. Leaving a job and starting a business
For the more adventurous, studies show that people over 50 are the most successful entrepreneurs, and combining a passion with business acumen acquired from a lifetime of work can lead to a new and satisfying professional endeavor.
This could entail parlaying a favorite hobby into a business, or maybe purchasing a franchise and putting those business skills to the test.
So what’s the best strategy for you? First and foremost: Think strategically and plan ahead.
Sara Geber, a retirement transition and life planning expert for boomers who can be found at LifeEncore.com, encourages employees in transition to consider their true motives.
As Geber put it, “Most people don’t take the time to understand their motivation: Are they running from something or going toward something more compelling?”
Geber said he believes adequate time must be spent thinking about what you want and how to get there. Failing to do that is a recipe for disappointment.
“The biggest pitfall is not having a plan and ending up with a lifestyle that is unsatisfying,” Geber said. “Of course, it’s also very important to have many long and deep discussion with a spouse or significant other about the future and what each one wants.”
Michelle Cortes-Harkins, financial planner and president of Harkins Wealth Management, thinks proper financial preparation for the next phase of life is crucial, which she boils down to three steps:
- Calculating your budget and looking at costs that might pop up unexpectedly, such as home or car repairs.
- Understanding your health-care costs.
- Analyzing your portfolio and knowing how long your money will last.
Cortes-Harkins added that the social component of changing careers is also important, stressing the importance of “knowing where and how you will get your social connections, since most of us have friends from work or work-related activities.”
Amin Dabit, director of advisory services for digital wealth manager Personal Capital, agrees: “It’s crucial to remember that retirement isn’t just about being financially ready, it’s also about being mentally and emotionally ready. This is usually a different challenge to different people.”
So whether you’re looking to phase out of full-time work or go for it with a business all your own, do some thinking about what you want, some planning on how to get there, and make it happen.