Rethinking Retirement in a Recession

Category: Financial and taxes in retirement

retirement_savingsIn the last year mentioning the word “retirement” often generates a pause or a snigger; it might even seem like you’ve made a sick joke. As in, “What retirement? My 401k has blown up, my job gone, and along with that my retirement dreams.”
True enough, millions upon millions of baby boomers are asking hard questions about their retirements.  Sadly for many of us, the new reality is here – we won’t have enough to retire on comfortably. For others the day of reckoning is all too close; they never saved enough. Even if there hadn’t been a global economic meltdown, they were never going to retire in the lifestyle to which they had become accustomed.

A July 4 article in the NY Times, “How to Make the Best of a Delayed Retirement“, offered interesting answers to some commonly asked retirement questions.  CBS MarketWatch has a slew of articles like “Can You Afford to Retire-Ever” and even a short video on “How Much Money Do You Need“.  Another article on MSN Money offers additional advice about Delaying Retirement. The good news from all these is that there are plenty of positive ways to take the new retirement realities in stride – through planning, imagination, and some hard work.    Here are some of the key points.

Eileen Zimmerman, the author of the article in the Times,  suggests setting  aside your fixed ideas about retirement. Perhaps your portfolio won’t allow you to completely retire. But you probably can find a flexible workstyle that will allow you the best of both worlds. You might be able to work from home on a flexible schedule, or even job-share. You could try a new career or position – maybe without the corner office of manager title or as much money – but it will pay the bills and give you something to do.

That brings up another point. Depression and general malaise all too often occurs when a person glued to their job suddenly finds herself without purpose or plans. Lynn Berger, a career coach and licensed mental health counselor in Manhattan and author of “The Savvy Part-Time Professional” was quoted on this point in the Times article:  “Many people experience a rapid decline in physical and mental health soon after retirement, due to lack of activity and purpose. ” Her point is that a gradual transition to retirement can be a good thing. It might also force you to do something that far too few retirees do before they retire – and that is plan out their objectives and dreams for retirement. In our experience humans aren’t built to do nothing, the happiest people among us tend to be those with a purpose.

The Times article also answers other interesting questions, including how to discuss your retirement (or non-retirement) plans with your boss. Hint: Do it and avoid surprises.

What are your retirement plans? Are you going to retire cold-turkey (or did you already)? Or will you gradually transition to retirement or  a new job? Share your experiences using the Comments section below.

For Further Reference:
How Much Can I Earn and Still Receive Social Security Benefits

Posted by John Brady on July 6th, 2009

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