When you hear the word "retirement," what picture comes to mind? For many, it's still some version of the classic image: Clock out at 65, cash in your pension or Social Security and settle into 20 golden years of golf and grandkids.
That version may have worked in 1995. But today? It's as outdated as floppy disks.
In my work helping clients prepare for retirement, I see a very different picture emerging. One that's longer, more fluid and far more personal. If you're still planning your retirement based on old rules, it's likely time to rethink your strategy.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.
Why the old retirement age doesn't work anymore
Somewhere along the way, 65 became the unofficial finish line. But that age has more to do with Social Security benchmarks than modern longevity. People are living well into their 80s and 90s, meaning retirement might span 30 or even 40 years.
That kind of timeline changes everything.
Retirement can no longer be treated as a brief reward at the end of a career. It needs to be a sustainable, purpose-driven phase of life. And that takes planning beyond the numbers.
Retirement on your own terms
The old model assumed retirement meant stopping work altogether. That's not what I'm seeing. Many of my clients are choosing a phased retirement — stepping away from high-stress roles but still working in some capacity.
One client, a retired engineer, now cuts grass at the local arboretum. He doesn't need the paycheck; he just enjoys being outdoors and having something to do. His purpose of staying active, engaged and connected is as vital as income.
Others are rethinking where and how they live. I work with a couple who split their time between Cleveland and Cincinnati to be closer to their grandkids.
It started as two weeks in each place, but it has evolved as their lifestyle and health needs have changed. That kind of flexibility is the new norm.
Why 4% isn't a golden rule anymore
A long retirement horizon introduces new financial challenges. One of the biggest is the sequence of return risk, the risk of retiring into a down market while withdrawing from your portfolio. If you're pulling out money while your investments are losing value, it becomes much harder to recover.
I use a bucketing strategy with clients, separating short-term income needs from long-term growth investments. This helps insulate early retirement years from market volatility.
Yes, we still use the 4% rule as a guideline, but we also adjust based on inflation, market conditions and client-specific goals. Retirement income planning is no longer a set-it-and-forget-it exercise.
Three moves that matter in the modern retirement playbook
I've found that there are three crucial steps that those nearing retirement should take to modernize their plan.
First, you need to redefine retirement for yourself. Ask: What does retirement look like for me? Is it travel? Time with family? Starting a new chapter of work or giving back? Defining your "why" leads to more intentional planning.
Next, this is where the numbers come in. You need to stress-test your portfolio with the help of your adviser. This will show you if you're prepared for a 30-year retirement with market ups and downs.
Run a scenario: How would you respond if the market dropped 15% the day after you retire?
Looking for expert tips to grow and preserve your wealth? Sign up for Building Wealth, our free, twice-weekly newsletter.
Finally, the ultimate plan must be done purposefully, not just considering numbers and percentages. Financial independence isn't just about having "enough." It's about having a life that reflects your values. Use that as the foundation for decisions — from when to retire to how much to spend.
Retirement is just the beginning
Too many people reach retirement and find themselves lost, not because they didn't save enough, but because they didn't plan for what comes next.
One of my clients saw this firsthand. His father spent his life building a family business, retired at 62, and passed away just a couple of years later. That experience stuck with him.
Determined to enjoy life on his terms, he bought out his siblings' shares of the family's Florida vacation home and retired early. He's now living his best life, sooner than most would expect, because he recognized that the old script didn't fit.
Retirement today is more than a financial milestone. It's a deeply personal phase of life that deserves planning grounded in values, not just spreadsheets.
So forget the retirement playbook from 30 years ago. Today's plan is to be flexible, purpose-filled and built to evolve with you, so you can truly enjoy where your hard work has taken you.
Signature Estate & Investment Advisors, LLC (SEIA) is an SEC-registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. This material is for informational purposes only and is not intended as individual investment advice or as a recommendation of any particular security, strategy or investment product. Investment decisions should be made based on the client's specific financial needs, objectives, goals, time horizon and risk tolerance.
Financial markets are inherently volatile and all investment strategies, including those perceived as low-risk, carry some level of investment risk. Past performance does not guarantee future results. Client experiences may not be representative of the experience of other clients and is not a guarantee of future performance or success. There is no guarantee that any investment strategy will achieve its intended results.
All investments carry inherent risks, including the potential loss of principal. Prospective and current advisors and clients should carefully consider their investment objectives, risks, charges, and expenses before making any investment.
SEIA is not responsible for the consequences of any decisions or actions taken as a result of the information provided herein. In particular, none of the examples should be considered advice tailored to the needs of any specific investor.
Securities offered through Signature Estate Securities, LLC member FINRA/SIPC. Investment advisory services offered through SEIA, 2121 Avenue of the Stars, Suite 1600, Los Angeles, CA 90067, (310) 712-2323
Related Content
- My Professional Advice: When It Comes to Money, You Do You
- 10 Ways to Generate Retirement Income
- The Retirement Rule of $1 More
- I'm a Retirement Psychologist: Money Won't Buy You Happiness in Your Life After Work
- When To Take Social Security Payments: Your Age Matters
-
How to Manage the Cost of Your Child's WeddingAs the price of getting married soars, footing the bill is becoming a true family affair.
-
Average 401(k) Fund Fees: Are You Overpaying?Average 401(k) fund fees and administrative expenses are, in some cases, shockingly high. But don't be misled by gloomy headlines. Here's the skinny.
-
Average 401(k) Fund Fees and Expenses: Are You Overpaying?
Average 401(k) fund fees and administrative expenses are, in some cases, shockingly high. But don't be misled by gloomy headlines. Here's the skinny.
-
The Seven-Day Financial Reset: A Simple Plan to Get Control of Your Money, From an ExpertSometimes, getting unstuck requires a reset. These practical steps can help you tackle your money issues and feel less overwhelmed by it all.
-
Three Pros (and Four Cons) of Hiring Multiple Financial Advisers: The View From a Financial AdviserThere's nothing to stop you from working with several financial advisers instead of just one. But take a balanced view of the risks and rewards first.
-
S&P 500 Tops 6,500 Even as Nvidia Slips: Stock Market TodayThe world's most valuable company closed lower after earnings, but the S&P 500 managed to notch a new record high.
-
How to Keep Your Work Friends After You RetireWork friendships can boost teamwork, lift your spirits, and make the job more fun. But when you retire, these friendships can fade. Here's a look at why that happens and what you can do about it.
-
DexCom, GE, SLB: Why Experts Rate These Stocks at Strong BuyWall Street gives these three diverse names Strong Buy recommendations with high potential upside.
-
Retirees, Make These Financial Moves Before the Fed Cuts RatesThe Fed will likely reduce interest rates in mid-September. Financial experts explain where retirees should invest now to boost retirement funds.
-
I'm an Annuities Expert: Here Are Two Ways to Use Annuities to Benefit From the OBBBTo qualify for a new tax break included in the One Big Beautiful Bill Act, some older adults need to lower their taxable income. Annuities can make that happen.
