Job Termination
The Gen-Nexters are comingIf you had the chance to retire early, say at age 50, would you? Could you? It's that time of year. After the bloat of the holidays and rationing of the bill payments, we're barraged with our annual dose of retirement requirement guilt. But "a little guilt can't hurt," as my grandmother used to say. BARBARA FRANK |
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 [ 2002-02-27 ] |
Retirement planning means more than picking an age and a beachfront property. At 50, statistics say we have about 33 years to live -- longer than we've worked until then! And with life expectancy increasing by leaps and bounds, who knows how long we're going to be hanging around?
Retirement experts have been warning us that we aren't saving enough. They tell us to aim for 70% of our current gross income for when we stop working.
"Pay yourself first", "Buy low, sell high", "When they yell, you sell, when they cry, you buy"....yadda, yadda, yadda...
That's fine and dandy if you have the discipline, the savvy and the smart luck of wise investing. But what about the rest of us?
If you think we baby boomers will retire much like previous generations (who lived through the Great Depression and World War II), you're in for a shock. We've reshaped society from music to mutual funds, and we won't stop now as we head into retirement.
We're living longer, we're more active and frankly, more seems to be expected of us. In his book, Prime Time: How Baby Boomers Will Revolutionise Retirement and Transform America (Public Affairs, 2000), Marc Freedman predicts that in retirement, the "Woodstock Generation" will "still be trying to change the world."
Rather than work till 65 with 20 years of golfing and fishing, we're more likely to see retirement as another career phase, a time for consulting, starting businesses or even totally different careers.
According to John Boeder, vice president and general manager of segment marketing for American Express Financial Advisors, "Boomers are more likely to "retire" from their first career in their 50s, take a few years off and then start doing something else."
How much leisure can you stand? Do you have the "oomph" to try something new?
Money may keep us comfy, but other non-financial factors make us who we are.
"Most people have been taught how to retire financially," says Robert Seller, president and chief executive officer of New York-based National Executive Service Corps. "But they haven't given much thought to what they're going to do for the rest of their lives."
Your lifestyle decision impacts others. When you stop working, you have oodles of time to fill. Too many people suddenly go from being on the Board to just plain being bored. Depression can set in quickly. Even though the only "loss" is gainful employment, giving up productive work can mean a loss of prestige, identity and self-esteem, not to mention reduced social interaction. What takes its place?
Even though nearly half of today's marriages end in divorce, those that succeed often last for 50 or more years. But a couple, no matter how devoted to each other, cannot spend 24 hours, day in and day out, in the exclusive company of one another. Both need outside interests and companions. What if you're busily squirreling money away, but you're cut off at the knees health-wise at 45? You may be covered for disability, life, and health through work, but when you retire, coverage will change. A recent innovation is critical care insurance, which provides a lump sum if you're diagnosed with one of the "biggies".
"Money doesn't buy you happiness, it buys you options," says Gary Opolsky, GSO Insurance Brokers. "You might have to dig into your savings for care," adds Opolsky. "The right amount of critical care coverage could replace the money you'd otherwise have put into your retirement plan."
1. Read all you can, and don't believe all you read. Healthy skepticism is, well, healthy! (The Wealthy Barber by David Chilton is a great place to start.)
2. Protect yourself from "transition trauma" with extra-curricular activities and a strong interpersonal network.
3. Talk to others who have done it. A "retirementor" can tell you how green the grass really is on the other side -- and where to find the cow pies!
Start taking care of yourself today -- physically AND fiscally. Then get on your Harley and enjoy the open road ahead!
(Barbara Frank is a corporate trainer, public speaker and communications specialist and president of Business Buffet, the Help-Yourself series. She can be reached at info@businessbuffet.com or visit the Web site at www.businessbuffet.com.)
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