We are revisiting what we mean by retirement, and it’s very clear that the definition of what people do even into their 70s is changing a lot, and people are continuing to work full time, continuing to work part time, and that has increased more for women than for men. There has been a big change in family structure, increases in divorce have left women more on their own, they may not be dependent on their husband’s pension or Social Security benefits, and of course women are living longer than men. So they have more need to think ahead to retirement.
Many retirees can live well on less than what the financial-planning industry tells them. Here's how to look beyond the formulas.
Expensive illnesses, long-term care and extreme longevity can suddenly throw retirees' estimated income needs out of whack. When the Society of Actuaries interviewed middle-class retirees in focus groups earlier this year, "they were managing very carefully, adjusting their spending where they needed to and trying not to draw down" their savings, Ms. Levering says. "But they were not planning for shock events."
Apple computer stores and car dealerships let you "try before you buy." What if you could do the same with retirement?
With this issue in mind, we posed the following question to The Experts: What's the best way to "test drive" a retirement before you leave the office?
This question relates to the latest Encore ...
Phased retirement programs help companies retain experienced workers and let employees scale back working hours to explore other interests. As baby boomers hit retirement age, many are realizing they're not quite ready to quit work cold turkey. Whether you're worried about the size of your nest egg, leaving unfinished projects at the office or simply filling up the hours of the day, an abrupt shift from corner office to golf course can seem a daunting proposition.
But for other baby boomers, retirement is no longer a magical day on which they will stop working, get a gold watch and live a life of leisure, said Catherine Collinson, president of the Transamerica Center for Retirement Studies. More than 60 percent plan to work past age 65 or not retire, she said. “It’s not their parents’ retirement,” Collinson said. “Baby boomers plan and expect to work longer, delay retirement and transition into retirement in a way that involves at least working part time.” The majority of baby boomers, Collinson said, are delaying retirement out of necessity.
An effective phased retirement plan has been a long-sought goal. However, under prior law, the problem was that an individual who was retirement eligible but wished to continue employment on a part-time basis generally had little economic incentive to do so because an employee's potential retirement benefits would often be equal to or greater than his or her salary would be for part-time employment.