Retirement Planning

In days not so long past, we all understood what was meant by the term “retirement planning.”  But in recent years changes in our society have brought about a change in many people’s thinking about “retirement.”  The main driver behind this is the fact that life expectancy is increasing at an increasing rate.  The fastest growing segment of western populations is centenarians (those living past age 100).  In combination with the gradual shift away from traditional pension plans to plans that are far less predictable, the “risk” of living into your 90s and beyond causes many people to be justifiably concerned about outliving their money if they retire early or, sometimes, even at a more traditional age.  Consider also that many people reaching traditional retirement ages are still active, vital, and productive.  They feel they still have much to contribute and the prospect of thirty or more years spent as “retirees” is simply not appealing.   For these people, retirement planning should be better described as “rewirement”  planning… preparing in advance to pursue new challenges beyond their primary career years as they move toward an ultimate, more traditional, retirement at some still-to-be identified date in the future.  So retirement planning can be more complex today than it has been in the past.  The question “what do you want to do when you grow up?” can justifiably be posed to many people in their prime working years to help them to begin thinking about how they may want to spend the next phase of their lives.

 

Retirement planning is all about making transitions.  It always has been.  It’s just that demographics and economics have imposed the possibility of another stage in our life cycles… a stage of continued active involvement in our communities and, possibly, continued economic contribution to society.  Sometimes this stage begins at an early or normal retirement age, sometimes even earlier.

 

Whether you are hoping to start a new career, devote significant time to charitable causes, or simply extend your primary career, it’s likely that your “retirement” years will be quite different from those of your parents.  That’s why you need to plan.

 

Such matters should not be taken lightly as the decisions made in any of these areas could greatly impact your own financial security as well as that of your heirs.  Planning matters and planning pays.