What Do You Want to Be When You Retire?
A new AP survey shows 66% of boomers plan to work for pay after retirement. Some plan to take part-time jobs to supplement their income. Many others are modifying the traditional concept of retirement by starting a second career. Well, why not? Boomers seem to revise every traditional lifestyle. Retirement is no exception. Many of these career transitions are into the social and service fields. This tracks with the idea that the boomer generation places a high value on helping society. Even those that truly retire are getting involved in nonprofit organizations in increasing numbers. It is clear that the baby boomers just do not see themselves as "retired" in the traditional sense.
How much of this "continuing to work longer" is due to their need for fulfillment or is related to financial shortfalls is not clear. The AP survey shows 43% of those that work will do so because they want to stay busy; 27% say they'll keep working to make ends meet; and another 19% will work so they can afford "extras". Certainly with the stock market volatility, decreasing home values and increasing energy costs, many are delaying retirement plans because of financial concerns. The top concern of those approaching retirement is health care. These costs continue to increase at an 8% annual rate. Medicare premiums have increased at an 8.4% rate since it was created in 1965. The other factor affecting working longer is the increase in life expectancy. As we reach the age of 60, we have to consider the fact that we may live for another 25 or 30 years. In addition to the added years, better healthcare is improving our quality of life. Living longer and healthier lives should be a good thing; if you can pay for it!
Preparing for longer life expectancies means considering a variety of options during retirement planning. These options relate to your priorities and their cost. Do you want to travel more? Then add that cost to your post-retirement living expenses. In our approach to retirement planning, we use a goal-based model. You define your personal activities or goals (like travel). Those are then quantified and prioritized in the model. Simulated projections of your current plan will identify which goals can be met. Then we can present possible changes needed to meet all or selected goals. This is a very effective way to see what impact different decisions will have on your retirement plans. That allows you to decide what works best. So whether you decide to work, either to support your individual lifestyle or out of passion, travel more, or just enjoy friends and hobbies, the plan supports you.
If you want to discuss retirement planning, call us at 972-644-9533.