With record numbers of Americans hitting the 65-year-old mark at present, retirement planning is more prevalent than ever. However, the modern-day concept of ‘retirement’ vastly differs from traditional views. Based on a LIMRA study, the year 2025 is projected to see on average 11,400 Americans turning 65 daily. Yet, when retirement planning is discussed, it's rarely seen in conventional terms anymore – a steady job until 65, followed by instant retirement and no further income.
Already, countless individuals in their 60s have altered their perspective on retirement. Due to the rise in lifespan and health span (years lived in good health and with high living standards), they aim to maintain professional relevancy and stay active. They are also branching out to pursue other interests or hobbies that their preceding counterparts couldn’t afford due to lack of time or energy.
In essence, given the increase in lifespan and health span, 65 is the modern equivalent of 45!
When mid-career professionals plan for retirement now, it doesn’t exclusively indicate a desire to stop working permanently. More often, it reflects their aspiration for financial independence – the ability to do what they want, when they want, for as long as they want, without relying on a paycheck.
As financial advisors, our role isn't merely suggesting clients to accumulate retirement savings or delay enjoyment until the age of 75. Instead, we guide them towards finding ways of spending today that yield the most happiness, memories, and gratitude.
Successful retirement planning necessitates finding a balance between funding current lifestyles and saving enough to ensure future financial security. It involves outlining present and future goals.
Retirement planning also involves determining what ‘retirement’ signifies to you. It could mean fully retiring at 60, semi-retiring at 55 and gradually slowing down, or leaving a corporate job at 55 and working as a consultant for the next 10 years. It may even mean retiring at 70 out of choice rather than necessity, or working in high-earning roles for multiple more years to allow pursuit of personal passions.
All in all, retirement planning is a part of life planning. The earlier you start strategizing and saving for your goals, the better equipped you’ll be for retirement, no matter how you envision it.