When to Retire: Redefining the Definition of Retirement

Presented By: Pennsylvania Capital Management

Do you know when to retire? When we think about retirement, a lot of people have opinions about the right timing — and the wrong timing. Answering this question can be stressful because it’s so personal, and many factors go into your decision-making process. 

I’m just going to say it: “Retirement” is a four-letter word. No, I’m not mathematically challenged. No, I’m not disparaging the notion that retirement is one of the things so many of us are working toward—it’s the time in our lives when we can decompress from the stress and pressures of work, knowing we’ve done the right thing and saved for this exact moment. And no, I’m not disrespecting those who can’t wait for the moment that work stops and channel-surfing begins. If you’re struggling to figure out when to retire, you need to shift your thinking and reconsider what retirement means. 

I’m a very strong believer that when you retire and become an inactive couch potato, you have signed your own death warrant. Without day-to-day challenges, your body and mind begin to wither. You don’t nurture yourself. You are on the fast track to an early grave. What I am suggesting, though, is that when you reach this age and when you’re thinking about retirement, I want you to forget about that “re-” word and use another one: “reinvent.”

The Real Definition of Retirement

Now is the time in your life when you should redefine what it means to retire from your career. This is the time when you reinvent what your life is about. This is not the time when you kick back for two decades, but when you push forward—to pursue your passions and enjoy (or perhaps even increase) your wealth. Retirement is a great gift, but all of the blessings and problems that occur in retirement are the results of one’s own actions or inactions. This is where planning is essential.

I get it. There are lots of reasons why people want to retire in the traditional sense. They’re tired of the hours, the stress, the boss, the rat race. And at the same time, they have a bucket list of things they want to do without the constraints of a 40-hour-a-week job. With freedom, they want to be able to knock things off that list, without having a fire-breathing boss yipping at them every hour of the day.

Those are all good reasons, and I get them. But my assertion is that retirement doesn’t have to be an all-or-nothing proposition where you work or don’t work. There are ways to get the best of both worlds—the stimulation and benefit of staying engaged in some way in some career, while also having the freedom and joy that comes from the traditional notion of retirement.

There are numerous ways you should plan for retirement and how you can figure out the amount you’ll need in your investment accounts for you to live comfortably for the rest of your life. (When to retire, for you, could equate to another 20, 30, or even more years beyond the average retirement age.) 

So, yes, we can’t even begin a discussion of what to do with your new life if you haven’t taken care of your lifestyle needs.

Assuming you have that locked down and have yourself in good financial shape with your investment income and retirement plans, you can start thinking about when to retire and redefine what life will be like in your 60s, 70s, and beyond. I will tell you that from experience with many, many clients in this exact position, retirement is a time when you can and should feel very rich—not only with how much money you’ve saved but also with the new life you’re about to lead.

Here are my tactics for how I’d encourage you to think about the next chapter. Remember, the home stretch of life doesn’t mean that you have to spend every single second at home.

Keep on Going (With Some Adjustments) 

Granted, I know there are plenty of people who hate their jobs. Don’t like the boss, tired of the same old routine, feel underappreciated, on and on. Perhaps one of the carrots waiting for you at the retirement finish line is that you no longer have to put up with the Grumpmeister as your direct supervisor. But I also know from dealing with so many people as clients, many of us absolutely love what we do. I love my clients and coworkers, and we feel more like a family, which provides a deeper level of relationship naturally. 

We love the challenge of work, the connection with people, the mental stimulation, the decorum, the sense of purpose, and all of the things that are mental jumper cables to our brains. If you fall into that category, then here’s the question: 

Why stop? Keep on working, keep on doing, keep on stretching your mind, and live what you’re passionate about. That said, you now may be able to play “let’s make a deal” with the people you work with and for.

Example: If you’ve solidified your retirement accounts, fine-tuned your cash flow (i.e., paid down your mortgage, helped your children find their way in the world, paid off student loans), and feel quite independent, you might ask to cut back to three days a week at a reduced salary. And with you having Medicare and Medigap coverage, your company will not only save in salary dollars but also the extraordinary amount it has to pay for health insurance for you. 

The other bonus is that working longer allows you to save a little less during your working years. 

As my favorite professor, Dr. Richard Marston, says, “If you postpone your retirement to 70 (as opposed to, say, 60), your depletion of savings could dramatically decrease (meaning you can spend more during the balance of your life).”

So, this is a win-win. You keep doing what you love, you get to continue adding to your wealth by having some sort of salary you didn’t think you would keep, and your company gets to keep your expertise on staff for a fraction of the cost. Remember, this is all about reinvention. 

A part-time gig at your formerly full-time place can give you the best of both worlds—the flexibility and freedom that comes from retirement and the high amount of mental stimulation that comes from working.

Start a Second Career 

What person in his or her right mind would start a new career at age 62 or older? You. 

Many people are living well into their mid-80s with sharp minds and agile bodies, so that’s more than 20 years that you could pour into a new career. Maybe it’s a modest one, maybe it’s one that has nothing to do with your current skill set, or maybe it’s something you’ve always wanted to do but never could afford.

Whatever it is, now may be the perfect time, with the added bonus of supplementing your post-retirement income. Of course, there are some areas that are off-limits (those Olympic bobsled dreams are probably over). Why not try something else? For example, some of my clients have pursued second careers in such fields as starting a new business, teaching, consulting, lecturing, and customer service, or even writing or teaching on a virtual basis from their home office.

There have been reports of retirees who have a desire to help people and keep a decent income starting a second career in nursing. Or maybe you could even take a chance by starting a family business with one of your kids—that old-fashioned ice cream shop (or newfangled fro-yo shop) on the corner of Main Street, as is the dream of one of our technologically savvy client couples.

Retirement can actually be the perfect time to become an entrepreneur; it’s when there’s less risk involved (assuming your retirement accounts are stable and your major family expenses of education and debt are paid off), and it could be the perfect chance to bond with your family at a stage in life when you’re both mature and you have lots of experience and wisdom to offer your kids. 

In our generation and culture, we rarely go back to live with our parents when we reach middle age unless there’s a health problem.

Many countries do have the tradition of multiple generations living together. There’s a collective wisdom and unity that happens when those groups are together. And it’s the kind of magic that can happen when multiple generations go into a business together. The older generation can provide the wisdom and funding, while the younger ones provide the energy.

Leverage Your Wisdom 

Another popular option for the retirement set: use all those decades of experience and expertise to help others, without the binding nature of a full-time job. By starting a consultant business (either formally or informally), you’ll be able to set your own hours, work as much or as little as you want, and have some additional income while keeping your mind young and fresh.

Take the case of my friend, Charles Hummel, who is now in his 80s and has now spent more than 23 years in reinvention after a 36-year career. He took advantage of an early retirement plan from the Winterthur Museum in Delaware, where he worked, but he decided not to have a “rocking chair retirement,” because he believed that having an active approach to retirement would contribute to good health physically and mentally. 

He’s stayed active in his profession by keeping involved with people and volunteering at the museum.

“I found it important to give something back,” he told me. “We all have special skills, experiences, or interests that can be put to positive use. 

In my case, I could only make modest annual financial contributions to the museum, but that hasn’t deterred me from mentoring, teaching, serving on various boards of trustees and advisory committees of other institutions, and lecturing as a way to continue making use of my experiences and knowledge, while occasionally contributing modest sums to my retirement income.”

Pursue the Passion 

Okay, so I know I made a joke about channel surfing, but I see it way too often. People enter retirement and assume that their day should be filled with breakfast, a nap, a few hours of staring at the news channel only to complain about said news channel, another nap, a cocktail, an evening game show, and then off to bed. 

Yes, after 40-some years working, you might deserve a double nap from time to time, but please don’t whittle away the balance of your life doing nothing. 

Retirement should be about pursuing your passion in earnest, whether that involves spending time with your grandchildren, traveling and reconnecting with long-lost friends, working on your golf game, or whatever it is that jazzes you and keeps you young and spritely. 

I think this stems from two fundamental questions: What’s your purpose? What do you want to accomplish in this world? 

The answers to these questions go deeper than just spending time with grandchildren; it goes to imparting your wisdom and experience to those who want it or volunteering to help people who need your help. By the way, one of my secrets is that I always try to make friends and spend time with people much younger than myself. It’s one of my career secrets to build success since I’m never going to retire fully. 

Think about it and you’ll realize how the sheer energy of being around people younger than you empowers you.

Now, this option isn’t about adding to your bottom line because I’m not suggesting that spending four days a week on the greens will allow you to make the Senior PGA Tour, but remember how I define wealth: It’s not all about the number in the bank account. It’s about spending all those years putting yourself in a position to have the freedom to bathe and splash and have a ball in that proverbial fountain of youth. 

Final Thoughts

As my father always said, “They’re going to take me out with my boots on.” I humbly suggest that’s the way you think about life too.

When to retire isn’t a mandate. Nobody will ever force you to retire. And, if you do choose to retire, you deserve to treat it however you wish. Do what brings you joy. Live, thrive, grow, and build. Dream big. Chase your passions. Think of your retirement era as the rest of your life, and your hard-earned freedom (or the freedom to pursue a different kind of work-life balance, if you so choose). 

Whatever you do, do it on your terms. Redefine retirement to suit your standards of living – and your personal fulfillment and satisfaction. That’s how you end up with a life well-lived; it’s not about the age you are, it’s about what you do with the time you have. 

Time is currency, so spend it wisely.