Before You Quit
I MAY NOT BE THE best source of retirement advice. After all, I’ve called myself semi-retired for a decade and yet, faced with a grim medical diagnosis, I continue to work far too hard. Moreover, even if I opt to fully retire—which is doubtful—cancer will likely ensure my retirement will be all too brief.
On the other hand, I do run a website devoted to retirement issues, and that means I spend a lot of time reading and thinking about the topic. Here are five notions that I’d encourage those approaching retirement to ponder.
No. 1: Enough. This is the biggest conundrum for those approaching retirement, and it has multiple dimensions. The obvious question: Do I have enough? This prompts folks to apply the four percent rule to their nest egg, check their proposed retirement withdrawal rate using Monte Carlo analysis, consider what’s the best age to claim Social Security and more.
But we also need to ask: Have I done enough? Do I feel like I’ve accomplished everything that I wanted with my career? For many of us, the answer is likely to be “no,” because very few of us ever feel truly satisfied. But that doesn’t mean we shouldn’t retire. Instead, we might look to work on that missing sense of accomplishment after we quit the workforce.
No. 2: Phased retirement. If folks can, I believe they should try to ease out of the workforce by working reduced hours. Among other things, this will give them a chance to test-drive their retirement.
We humans are not very good at figuring out what we want. I’ve heard folks say they’d like to spend their retirement writing, or volunteering, or teaching, or woodworking. My first question when I hear a prospective retiree’s wish list: Do you do these things now? If not, you may discover these things aren’t really for you. After all, if you truly have a burning desire to do something, why aren’t you doing it already?
As academic psychologists put it, we miswant—and it’s through trial and error that we get it right. We shouldn’t assume we know what we want from our retirement years. Instead, we should prepare for a period of experimentation. An example: I was sure I’d love teaching personal finance. I taught for two semesters as an adjunct professor at a small private college north of New York City. Love, it wasn’t.
No. 3: Working part-time. This is closely related to No. 2—and, in fact, may prove to be the same thing. For a successful retirement, experts say we need a bunch of things: Not just income, but also a sense of purpose, an identity, a structure to our days, and social, physical and intellectual stimulation. But guess what? These are all things that we get from something called a job.
By the end of our career, we may hate what we do for a living. But don’t ignore all the benefits—financial and otherwise—that come with working. Forget the FIRE movement—financial independence-retire early. I’ve been pushing an alternative that I call ICE, short for “I’ll continue earning.”
I think that folks should consider working part-time through their early retirement years, perhaps as part of their phased retirement. I know some retirees strenuously object to the idea of doing anything that looks like a job. But that doesn’t mean working part-time isn’t a good idea for others. The fact is, work offers many benefits, and not just financial.
No. 4: Prepare to be shocked. Regular HumbleDollar readers will have heard that retirement has three phases: the go-go, slow-go and no-go years. From what I’ve heard and observed, there’s a lot of truth to this, and it’s a reason we should plan on being active in those early retirement years, whether it’s traveling or ticking off other bucket list items.
But I’ve also heard and observed that we can look at retirement as having three other phases: honeymoon, shock and redefinition. After the initial exuberance of escaping the work world, many folks suffer a sense of letdown, and they need to figure out what they’re going to do with the rest of their retirement that feels meaningful and that gives them a reason to get out of bed in the morning.
No. 5: Your retirement may last many decades. Mine won’t—but there’s a good chance yours will. Our brains may tell us that life is nasty, brutish and short. The numbers tell us otherwise.
For a couple both age 65 and in reasonable health, there’s a 60% chance that one spouse will live to age 90. It’s possible that some people will spend close to half their adult life in retirement. Obviously, that has financial implications. But it also has implications for what folks should do with their time.
I remember hearing a science professor talk about how, when he was in his 60s, he had one last research project that he wanted to tackle, but he decided he might not live long enough to finish it. The professor chuckled as he told the story—because he was now in his early 90s.
Jonathan Clements is the founder and editor of HumbleDollar. Follow him on X @ClementsMoney and on Facebook, and check out his earlier articles.The post Before You Quit appeared first on HumbleDollar.
