Living Well in Retirement
Retire to Your Dream Job
A satisfying combo: work, leisure and extra income.
By Mary Beth Franklin, Senior Editor, Kiplinger's Personal Finance
Bob Frick, Senior Editor, Kiplinger's Personal Finance
July 30, 2008
Advertisement
Editor's note: This article is adapted from Kiplinger's Retirement Planning 2008 guide. Order your copy today.
Baby-boomers asked to define R&R are more likely to say "rock 'n' roll" than "rest and relaxation." That's a good thing, given that the old-fashioned definition of retirement as 25 years of leisure is built on two misconceptions, says gerontologist and author Ken Dychtwald.
Related Links
The first, says Dychtwald, is the notion that "if you remove work from the lives of productive, intelligent and active individuals, they will still be happy." On the contrary, says Dychtwald, "for many, retirement becomes a time of boredom and isolation."
The second misconception is one of entitlement: the expectation that the working population will be able to subsidize 78 million baby-boomers, the first wave of whom turn 62 this year.
The truth is, both paid and volunteer work will be available to enterprising baby-boomers. And work not only helps pay the bills, it also feeds the soul. In fact, 75% of boomers say they want to keep working (but not full-time), and more than half want to start a new career, says Dychtwald, author of Age Power: How the 21st Century Will Be Ruled by the New Old (Tarcher/Putnam, $15).
Boomers are redefining what it means to grow old. Although the most senior among them can start collecting Social Security benefits now, many of them won't. Instead, they'll stay on the job so they can bolster their retirement savings and hang on to employer-sponsored health benefits until they qualify for Medicare at 65. Others, who are more financially prepared, may take the opportunity to pursue a new career or volunteer -- and find a life that's more enticing than living in a gated golf community. And some will look for part-time or seasonal work just to stay busy or to make ends meet.
So how do you prepare for a successful and exciting semi-retirement, an encore career or even a series of careers? The trick, says Dychtwald, is having "a vision and dream for the life you want to live, and the capacity to fund it."
David Corbett, founder of New Directions, a Boston firm that helps middle-aged executives and professionals figure out their next step, agrees. "Many of our clients want a 'portfolio' of several activities to bring balance to their lives," such as working part-time, volunteering, taking classes and spending more time with their families, says Corbett. "Our most successful clients are the ones who start planning their transition three to five years in advance."
Dianne Belk and Larry Calder would say "amen" to that. When they decided to retire in the 1990s, they came up with their own version of the so-called bucket list: 4,000 things to take into consideration before they sold their companies and exited the working world. It took them five years to extricate themselves from their jobs, possessions and ingrained work habits.
For others, the transition is easier. In 2006, Joe Roland, formerly an editor with the Buffalo News, in New York, took a buyout that let him retire five years early and collect his full pension at age 60. The buyout was fortuitous, but Roland already had a plan for an encore career. A flight instructor part-time for six years before he retired, he had thought about doing the job full-time.
The self-described newspaper junkie now enjoys the best of both worlds. He fills in at the paper on nights and weekends and spends his days giving flying lessons. Between his pension and two part-time jobs, Roland figures he made more money last year than he did working full-time. And so far, he hasn't touched his savings.
Roland likes the structure of his two part-time jobs because they leave time for occasional Colorado ski trips and Las Vegas golf outings, yet provide the newsroom rush he craves. "If someone didn't say, 'We need you Tuesday night,' I'd go out of my mind," Roland admits. That kind of schedule doesn't suit everyone. Roland says some of his retired friends are perfectly content doing nothing.
One key to making Roland's new life work is access to health insurance. He's covered through his wife, Monica, who continues to work as a schoolteacher. "If it weren't for that, I'd still be working full-time," says Roland.
For many workers, access to employer-provided health insurance is one important factor in deciding when to retire. In 1997, 22% of private-sector companies offered health-care benefits to early retirees who were too young for Medicare, according to the Employee Benefit Research Institute. By 2005, the number had slipped to just 13%, and the downward trend continues.
Plan Your Transition
There are many reasons why working until 65 and clocking out is no longer the definitive retirement model. But the main reason is that many retirees need to work, and the economy demands it, too.
Longevity should be viewed as a gift, says Marc Freedman, founder of Civic Ventures, a think tank that helps "older adults with a passion for service." The U.S. will need experienced seniors as it grapples with social needs and faces labor shortages in such critical areas as education and health care, says Freedman.
Discuss