Retiring On Purpose

I ran into a friend recently who’s a hairdresser. He’s been in the business now for 50 years and has seen it all from the bouffant to the bob. After owning his own salon for as many years, he’s looking to sell it—on one condition: He stays as an employee. Despite being nearly 75, he has no plans to retire. Like he says, “What would I do every day?”

His story’s not that unusual. According to a June 2016 Pew Research Center analysis of employment data from the federal Bureau of Labor Statistics, more older Americans – those ages 65 and older – are working than at any time since the turn of the century, and today’s older workers are spending more time on the job than did their peers in previous years.

This is a new era of retirement revolution. Pensions and corporate stewardship have gone the way of the dinosaur. For some, not working isn’t an option; however, many are choosing to stay in the workforce—and thriving. As someone who’s been helping people retire for the past 25 years, I’ve witnessed the change in attitudes first-hand about retirement. Today I’d be negligent if I planned a client’s retirement assuming that he or she will be leaving the workforce at age 65. As a financial planner, I must get a sense of my client’s true age. By that, I mean his biological age, not his chronological age. For instance, I may have a client who’s 62, but he feels more like 50. He’ll have no intention of retiring in a few years. Like my hairdresser friend, he refuses to be defined by his age.

For me, the planning has evolved from retiring to retiring on purpose. We’re living longer, and we want to stay relevant. If you’re 5 to 10 years out from retiring, finding a reason to get up in the morning will be as important as the financial planning. Think about it: What if every day was a Saturday? Sure, the first several might seem blissful with days spent on the golf course or shopping at Target, but after a while, you’d probably get bored. Carlos Santana, the famous guitarist said, “The only thing that has ever made me feel old is those few times where I allow myself to be predictable. Routine is death.”

Besides keeping you alive (That’s true. Oregon State University found that people who continue to work past 65 have an 11% lower chance of death from all causes), the benefits of working into an older age are numerous. Of course, there are the financial benefits. The more years you work, the less money you’ll need take out of your retirement accounts. And you can delay taking your Social Security. For each year you delay between the ages of 62 and 70, your benefits grow by 8% annually.

The mental benefits are just as important. Working longer keeps your mind sharp. Like the saying goes, “Use it or lose it.” It also keeps you connected to other people, decreasing the chance of isolation. Moreover, and perhaps most important, working can give you a purpose, a sense of identity, a reason for getting up in the morning.

If you still need a little inspiration or motivation to retire on purpose, just look to some of these stars in their 70s: Helen Mirren, Robert DeNiro, Betty White, Morgan Freeman, Dick Van Dyke, Al Pacino, Mick Jagger. Like Mick said, “How Can I Stop?”

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