You may have heard the quote, “Portland is a city where young people go to retire,” by Fred Armisen on the television show “Portlandia.” I’m not sure that is precisely what I have in mind for this post, however, I would like to examine how many people are rethinking retirement both out of choice and necessity.
A New Paradigm
The paradigm is no longer a life long career at one company and a pension that covers retirement costs at age 65. Also, many people in their 60s don’t identify with the term seniors and don’t want to spend their time in the way we stereotypically think of retirement. I’ve often told those approaching retirement to practice retirement. You might not like living in Florida and playing golf every day as much as you thought…then again you might love it!
I hear more and more stories about people thinking outside the box when it comes to retirement. Some are choosing to take time off for pet projects that might lead them into another career or they are choosing to work longer for work they love. Others start second careers in retirement.
Instead of planning to quit work at 65 and start living I see a shift toward thinking in terms of lifestyle balance, personal capital, and living a meaningful life, both now and in the future. This article titled, Retirement Planning The Millennial Way explores these concepts in more detail.
Old Concepts (that still apply)
Accomplishing the things mentioned above still takes planning and savings. Just because the retirement paradigm is changing, doesn’t mean that saving in retirement accounts isn’t important (they have tax advantages). However, these funds might be used in a different way than a traditional retiree. Many personal financial principles still remain. Save early and often because the time value of money is on your side. Always live within your means and build financial security by saving and managing risk.
Be sure to plan for the life you want, as well as utilizing retirement accounts in order to SaveUp!
This post was written by SaveUp’s personal finance contributing writer, Catherine Hawley, CFP®.