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Yes, Jimmy You Can Retire – If You Really Want To…

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by Joe Casey

Jimmy from the block.

You know him. Or someone like him.  Always a step or two ahead. Smartest person in the room.  (At least according to him. I’ve personally never had that experience. Sometimes I wonder if Jimmy should spend time in some different rooms).

Jimmy is well read. He stays on top of things (he’ll tell you). He is convinced that he’ll never retire. The concept of retirement is ‘so 20th century’, he says. It’s pure folly for anyone to even think about ever retiring today. Retirement is over – for all of us. We will all have to work until we drop. He can explain why in compelling detail, and cite all the articles – chapter and verse with scary stats – if you’d like (He’s world class at this. He’ll tell you that, too).

While he always talks a great game, sometimes Jimmy has convinced himself so well that he fails to see or consider other points of view. Or facts that don’t support his perspective. (You may not know this yet, but Jimmy coined the phrase ‘alternative facts’ in his epic takedown of our 10th grade science teacher in a discussion on Charles Darwin. I must have been out sick that day, but he recounted it for me blow by blow just last month).

It May Not Be Up to You

Jimmy’s not alone. The retirement plans of many people can be summed up as ‘I’ll just keep working.’

While the labor participation rate of people 65+ is trending up, only 15% of those surveyed in the 17th Annual Transamerica Survey report that they do not plan to retire.

And while the average age that people plan to retire at is 65, the median age that people actually retire at has remained at 62 for over two decades, according to a 2015 report by the Employee Benefit Research Institute.

Many people end up retiring earlier than they planned, for a variety of reasons, notably organizational changes, downsizing or buy-out, health issues or to take care of a family member.

So Jimmy, you may plan to work forever, but it may not be your call.

Retirement May Include Work, But That May Not Be Right for You

Jimmy and I do agree that the old model of retirement where you work at one company, retire at 65 with a gold watch and head off to a life of leisure is passé.

We agree that when people do decide to step away from their primary career, it’s wise to stay active and engaged. We’re not talking about a life of walk the dog, play golf, sit on the porch, rinse and repeat.

And we concur that for many people, work – in some fashion – will be a big part of the equation in their retirement years. The 2016 Transamerica study found that “Half of women plan to work after they retire, including 11% who plan to work full-time and 39% who plan to work part-time. Similarly, 52% of men plan to work after they retire, including 15% full-time and 37% part-time”.

We also both recognize that for many people continued work may entail self-employment, which can be a big transition.

Create Options and Choices That Are Right for You

But many of us know something that Jimmy hasn’t sorted out yet. One size does not fit all. Life in retirement is a uniquely individual experience.

The ‘doom and gloom’ articles that Jimmy cites about the looming retirement crisis highlight the very real financial challenges that many will face. But it’s also a fact that there are many people who are prepared. Many have saved and invested and/or are willing to make trade-offs to shift to a different lifestyle.

The 2017 Retirement Confidence Survey found that “Six out of 10 American workers feel very or somewhat confident about having enough money for a comfortable retirement, though just 18 percent feel very confident.”

Jimmy still firmly believes that none of us will be able to retire. I believe that many people are able to retire and create a different portfolio of activities that are right for them.

In the old model of retirement that Jimmy (correctly) declares dead, the policies of the government and corporations helped define the path. Today retirement is being redefined, but now it’s up to us. We each need to define the path that’s right for us.

What I see in my work isn’t visible to Jimmy yet. People who have been successful and have done the right things to prepare financially for retirement often haven’t done much planning for the non-financial side. They have dreams and ideas, which are often vague, about what they’d ideally like to do after they move on. But they haven’t clarified them or thought much about how to make them happen – or if they’re aligned with what their spouses or partners are really thinking. For those who want to keep in working in some way, usually part-time, they don’t have a sound plan in place on how to prepare for that yet. But with exploration, reflection and planning, they chart a new course and smooth out the transition to their next chapters.

A New Identity

Jimmy’s been successful. He does tend to be visionary. (He’ll tell you the story about our 8th grade Science Fair where his ‘legendary’ project was a sketch of a roadmap to create something like the Internet. “Many years before Al Gore! And I got a B minus. Creative science fiction, but impractical computer science’ was the comment!’).

And he has resources. He has a lucrative job and it sounds like he’s a smart investor (“Don’t forget: I went to 100% cash in September 1987 and shorted Lehman in May of 2008…” he likes to remind us).

But the truth is that Jimmy, at 61, is scared. He’ll never admit it, but despite his bravado, uncertainty gives him fits. His whole identity and status appear to be centered around his job and I sense that he may not know who he’ll be without it. Right now, he has a hard time envisioning what he’s do with his time without his job.

But don’t worry about Jimmy. He has many other options – he just can’t see them yet. He’ll figure it out though –and he’ll definitely tell us all about it. We’ll keep you posted.

References

Collinson, C. (2015). 16th annual Transamerica retirement survey: A compendium of findings about American workers. Los Angeles: Transamerica Center for Retirement Studies. Retrieved from https://www.transamericacenter.org/docs/default-source/resources/center-research/16th-annual/tcrs2015_sr_16th_compendium_of_workers.pdf

Collinson, C. (2016). 17th annual Transamerica retirement survey: Influences of generation on retirement readiness. Los Angeles: Transamerica Center for Retirement Studies. Retrieved from http://www.transamericacenter.org/docs/default-source/retirement-survey-of workers/tcrs2016_sr_retirement_survey_of_workers_generation.pdf

Helman, R., Copeland, C. & VanDerhei, J. (2015, April). The 2015 Retirement Confidence Survey – Having a retirement savings plan a key factor in American’s retirement confidence. Employee Benefit Research Institute, EBRI Issue Brief, no. 413.

Greenwald, L., Copeland, C. & VanDerhei, J. (2017, March 21). The 2017 Retirement Confidence Survey – Many workers lack retirement confidence and feel stressed about Retirement Preparations. Employee Benefit Research Institute, EBRI Issue Brief, no. 431.

 

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