Are you intentionally delaying retirement because you can’t imagine a life without work? Perhaps you want to keep working for financial reasons or maybe you still thrive on the sense of fulfilment derived from your career. But even if you cannot consider the thought of retiring, it is important to have a Plan B. If your company downsizes, or your role is made redundant once you are past retirement age, you will benefit from having a strategy in place to start a new “working retirement” phase.
While a generation ago, there was only one way to retire, today retirement is an individual process, so you can tailor your retirement plan to your needs and wishes. Barry Lavalley of the Retirement Lifestyle Center in the US has identified five different lifestyle approaches to retiring, so you can see which plan would suit your circumstances.
This is the “classic” model of retirement, where you give up work completely, receive a clock as a farewell gift from your colleagues, and spend the rest of your days pursuing leisurely activities like golf or lawn bowls. For anyone with a healthy retirement fund, a supportive partner, and dreams of travel or extensive time with grandchildren, this is an ideal option. However, it is not for everyone! If you thrive on the challenge and reward of working life, or if you are not confident that your investments will fund a lengthy retirement, this might not be the option for you.
This is a method of easing into retirement, by cutting down your work hours and responsibilities, so you can still draw an income and stay involved in the workplace without working full time. This is a particularly popular choice for the current generation of retiring workers, and many workplaces will create innovative work options to retain the expertise of older staff.
Semi-retirement is a variation of graduated retirement, where you retain some input in the business although you don’t work full-time hours. This is a popular option for self-employed individuals who have built their business to a point where it has become self-sustaining, so they can draw a reasonable income while dedicating less time and effort to the business.
If you’ve tried retirement and find that playing golf and planning overseas jaunts just isn’t stimulating enough, you could “reverse” your retirement and re-enter the workforce. This is a popular option for former executives who become consultants in order to retrieve the social interaction and mental stimulation of working life, on their own terms. Reverse retirement has the added benefit of maintaining your income, so it is also a good option for anyone concerned about the lasting power of their retirement fund.
Remaining in the workforce
A small but significant percentage of people will choose not to retire, partly because they enjoy working and partly to avoid financial pressure. If you need to continue working, review your skills regularly in case your current employer downsizes or offers a retrenchment package. When your skills are up-to-date and in demand, you will find it easier to secure a new position.
Remember, whichever retirement option you choose, your circumstances may change or you might not find Option 1 as appealing as you expected, so you may need to fall back on a second option. Make sure you are prepared to be flexible or innovative in case you have to switch retirement options.