My younger brother and I recently took advantage of an extended opportunity to sit down and enjoy a beer without needing to rush elsewhere. Relaxing and discussing nothing in particular, our conversation took frequent detours away from topics that, on their own, might have kept us busy all night, although our default topics revolve around family and sports, sprinkled references to the creeping onset of aches and pains. it never bothered us.
“So when are you going to retire?” I asked, half-expecting an answer in one-syllable words. But my brother smiled.
“I don’t want to stop completely,” he finally replied. “But maybe I’ll work two to three days a week and get on with my life the other four or five.”
The follow-up question was inevitable: “When?” »
“Not sure. Two, maybe three years later.
“Did you do anything about it?”
“I wanted to do it, but I’ve been busy…”
I frowned. “You should do something about it. Go talk to an advisor. Plan what you are going to do.
“Stop pestering me and pour me another drink.”
We’re not the first brothers to discuss financial planning – in fact, we skimmed over the subject rather than discussing it – but after the pandemic, planning for partial retirement is an issue that seems to be the most important in the world. mind of many fifty-somethings.
It is estimated that around five million people in their fifties are ready to work beyond the official retirement age. More than 300,000 never want to retire. The majority of late baby boomers want to work in some form after retirement, ideally on a part-time basis, as they recognize the financial and social benefits of remaining in gainful employment.
Ken Carter of personal finance website Moneymapp.combelieves that whereas 30 or 40 years ago workers couldn’t wait to retire, a significant number of gray-haired people today simply enjoy working.
“Following the pandemic, we have seen an increasing number of people who want to relax in their late 50s or early 60s, perhaps working a few days a week and using their free time to pursue other interests. he says.
“This desire to continue working part-time has several advantages, in particular because it responds to a common dilemma. Namely, how best to fund a reasonably comfortable lifestyle in retirement,” Carter adds.
Working a few days a week gives older workers a chance to get their finances in order. Mr. Carter suggests they start by following a simple plan.
Get all your finances in order, including pensions and savings. It may take time to track down old company pensions or details of savings bonds you had with banks or building societies, but this is precisely the opportunity to do so.
Calculate what you have and decide when, approximately, you would like to retire. Be realistic when determining the level of income you need to maintain a comfortable standard of living. If you wish, you can continue to generate income by working part-time, while the value of your state pension should not be ignored.
Prepare a budget. Keep in mind that while most people are happy to see work-related costs, such as commuting, drop from their budget, remember that traveling and enjoying other interests also have a cost. If there is a shortfall, take advantage of the pre-retirement planning opportunity to take action.
Create an income strategy that fits your lifestyle. “Most people want a mix of security and flexibilityadds Mr. Carter. “If they’re healthy, they can continue to supplement their long-term retirement income by working part-time.
It would seem that while our grandparents were happy to stop working if they were lucky enough to turn 65 (and given the real hardships and wars they faced, who could blame them?), the future today’s retiree is a different beast.
Healthier and mostly wealthier than their predecessors, none have experienced the hardships of previous generations. Those smart enough to recognize this are likely to adopt financial planning in order to enjoy an extended retirement. Making an appointment with a financial planner to get a professional opinion on the effectiveness of a retirement strategy makes just as much sense.
For more financial advice, check out Peter Sharkey’s regular blog, The week in numbers.
This column is for general information only and should not be considered financial advice for individuals. Consult your professional advisor.