Why you should plan for your (un)Retirement sooner than you think.
This is not your parents’ retirement. For one thing, we are living healthier and longer lives, which means that more of us are working, and want to work, well into our 60s, 70s, and beyond. This reality has led to the inception of new opportunities and possibilities for what late-stage careers can look like. Concepts like (un)Retirement or a Second Act (maybe a Third Act!) focus on those career opportunities that occur after our primary careers, setting a new pace for our working lives that enables us to continue making an impact.
In July, The Avoka Group conducted our “(un)Retirement: The Ultimate Career Pivot” study to research what retirement looks like for those in their 40s, 50s, and 60s in 2020. We started with the hypothesis that while many people plan for their financial retirement, they have not thought through the non-financial aspects for how they will spend their time to adapt to their changing goals and capabilities and were therefore ill prepared to make a successful transition. We investigated various facets of this planning from when they expected to begin, to key considerations, to their comfort levels in making this ultimate pivot.
Interesting Findings:
Most of us want to keep working, but in a different way. 51% of respondents, the majority of whom are employed full-time, chose Bridge Employment (to learn more about this type click here) as a way to transition out of their primary careers followed by 26% choosing Traditional Retirement and 23% choosing an Encore Career.
We recommend thinking of the choice as a continuum. You might want to stay on your current path for as long as possible, or simply adjust your pace with a series of different roles that can take you through your journey. Whichever option or series of options appeals to you, take control, finish each stage on a high note, and continue to contribute, learn, and grow.
Be careful about making assumptions. In our one-on-one interviews and through survey comments, we found that many people are making assumptions about how long they will be able to stay in their primary career/job. It may be worth your time to consider some “what if?” scenarios to test these assumptions and make some plans for if they do not hold.
Unfortunately, ageism is a real threat. Studies by AARP found that “older workers are prematurely pushed out of longtime jobs and 90 percent of them never earn as much again.” So having a contingency plan, not just for your financial health but also for your mental needs, is the smart move. Or, to frame it in a more positive light, take the opportunity to really explore other interesting possibilities and maybe find your new purpose now. As one of our participants said, “the idea that maybe I could do something better aligned with my current talents [and] personality is somewhat awe-inspiring”.
The non-financial needs are just as important as the money. When asked to rank the importance of four non-monetary work benefits, 64% of participants chose Purpose (what drives you and gets you excited to work) as the most important, with Community (social connections and friendships) and Identity (how you see yourself or want others to see you) neck-in-neck for second, and Structure (discipline and routine that organize your time) coming in fourth.
This could be a key reason for the popularity of (un)retirement; if so many of us get a sense of purpose from our careers, imagining life without that can be daunting. By spending time evaluating your own non-monetary needs, you will be able to make more informed choices that are rewarding and fulfilling.
Time to plan will not miraculously appear. When presented with a quantitative choice of when they would begin planning for this next phase, 75% said 2-5 years prior, which is a positive indicator for a successful transition. However, when we probed these responses, we found that many of these same people admitted that they could really not imagine having the time.
Like for anything important, we must carve out some time and mental space to plan for this critical change in our lives. A strategy for this ultimate pivot arms you with the tools to evaluate your options and say ‘No’ to those demands on your time and energy that no longer align with your values and needs.
Our research allows us to better understand how pre-retirees are taking control of their futures and how we can better assist them in developing their strategies. With so many possibilities available for post-career life, crafting one can be overwhelming. Your retirement is not just a numbers game – it is a new and important chapter of your life; one we believe deserves careful consideration and attention. We know that the best approach accounts for your unique and changing needs and capabilities and we are eager to help you design a strategy that works for you.