The "New" Retirement

[REWahoo]

I wrestled with where to post this article from SmartMoney.com and decided it fit best on the Young Dreamers board. The subject is one we've all seen dozens of times, how the retiring boomers are "redefining" the meaning of retirement.

http://smartmoney.com/retirement/planning/index.cfm?story=retire2005&pgnum=1

One of the key themes is continuing to work in retirement , and the following chart is one you Young Dreamers need to commit to memory since it shows the value of continuing to work beyond age 65...

 

[JPatrick]

WOW!!  All that money and I'll only be 70!
Of course part of the scam for the young dreamers is that you may be 70, but you'll look and feel like 55.

Pass the kool aid!

 

[Sisyphus]

Pass the kool-aid, indeed!

At first I thought the post was a joke, or an article from "The Onion", but then realized it was real.

It's articles like this that make me glad to be a "freak", and glad that I found this forum! I wonder what % of people read that article and thought "what a great idea... glad to know I can save even less now"?

Thanks for posting this.

 

[Cut-Throat]

I wrestled with where to post this article from SmartMoney.com and decided it fit best on the Young Dreamers board.  The subject is one we've all seen dozens of times, how the retiring boomers are "redefining" the meaning of retirement. 

http://smartmoney.com/retirement/planning/index.cfm?story=retire2005&pgnum=1

One of the key themes is continuing to work in retirement  , and the following chart is one you Young Dreamers need to commit to memory since it shows the value of continuing to work beyond age 65...

So, if I am reading the chart correctly, you give up 5 years of retirement and if you live to the statistical average age of 85 you get to die with $700K instead of only $500K.

Even if you live past 85, what are you going to do with the extra $200 Grand - Buy a ferrari? At that age, you'll be lucky to back a pickup out of the garage!

 

[HFWR]

A young dreamer should use the other end of the curve; saving early also allows the magic of compounding to works its magic.

Of course, I don't consider retiring at 65yo early...

 

[Nords]

Of course, I don't consider retiring at 65yo early... 

Now, let's be nice to these "old diggers"-- they're gonna solve all the Social Security & Medicare problems with their tax dollars!

 

[Marshac]

Now that our housemate has moved out to a new job across the state, I have been updating my spreadsheets to reflect the new reality- every month will cost about $500 more. No biggie.

Going back to the other thread on money fears, I said that mine was a flat market, so I toodled around with a real rate of 0% just to see what would happen in my spreadsheet.... it sucked, but things still more or less go according to plan. Just to see what a nice 7% real rate would do, I changed the number.... my formerly linear chart lines became exponential.... this struck me as somewhat sad that there are SO MANY people out there who lived through a 20 year period of similar growth, and yet managed to save so very little. Boomers truly had nothing but the wind do their backs, and unfortunately have nothing to show for it....present company excluded of course The fact that so many are 'redefining' retirement by NOT retiring until they're nearly retired from this world is somewhat disturbing...

 

[MooreBonds]

Does anyone else see the glaring "error" (IMO) that the picture assumes?



"Work 2 days a week and collect 40% of your pre-retirement income".


Anyone know where they can get a part-time gig doing their former line of work (or something completely different) at the same hourly/annual rate? I know of none...perhaps I just haven't been barking up the right tree?

 

[vic]

Does anyone else see the glaring "error" (IMO) that the picture assumes?



"Work 2 days a week and collect 40% of your pre-retirement income".


Anyone know where they can get a part-time gig doing their former line of work (or something completely different) at the same hourly/annual rate? I know of none...perhaps I just haven't been barking up the right tree?

That is the first thing I was thinking about too. I guess this equation works well if you work retail or fast food or something like that. Otherwise, keep on dreaming.

 

[sgeeeee]

I'm not sure what the graph is actually plotting, but part-time work for 5 years will significantly increase your portfolio and SWR as well as buy a lot of insurance against outliving your nest egg. There are a couple of major factors contributing to the transitional retirement idea: 1) boomers are going to live about 7 or more years longer than those that first established a mid-60's retirement norm. 2) The work of typical boomers is much less physically demanding than the work of those who lived earlier. Retirement in the past has often come only when people were too frail to continue working.

Although 5 years of work at 40% time is less freedom than full retirement, it certainly provides more freedom and far less stress than a full time job.

As far as the 40% salary for 2 days a week work goes, I have been offered salary in percentage to the amount of time I am willing to spend. I chose to work only 1/4 time, so I only take home 25% of the full-time Director salary (healthy 6 figures).

I also think a lot of people derive more than salary from their jobs (maybe not people on this board, but other people). Some people are motivated by accomplishment at their job, some by their friends and colleagues, some like to feel like part of a team, . . . These people are reluctant to retire outright. Transitional retirement gives them a chance to cultivate hobbies/interests/volunteer efforts outside of work to fill the needs that they satisfy on the job.

Now I fully expect to be blasted for pointing out that some people feel differently than the typical INTJ ER curmudgeon. That's okay. I would gladly defend your lifestyle choice against the typical boomer too.

 

[MooreBonds]

As far as the 40% salary for 2 days a week work goes, I have been offered salary in percentage to the amount of time I am willing to spend. I chose to work only 1/4 time, so I only take home 25% of the full-time Director salary (healthy 6 figures).

I also think a lot of people derive more than salary from their jobs (maybe not people on this board, but other people). Some people are motivated by accomplishment at their job, some by their friends and colleagues, some like to feel like part of a team, . . . These people are reluctant to retire outright. Transitional retirement gives them a chance to cultivate hobbies/interests/volunteer efforts outside of work to fill the needs that they satisfy on the job.

Now I fully expect to be blasted for pointing out that some people feel differently than the typical INTJ ER curmudgeon. That's okay. I would gladly defend your lifestyle choice against the typical boomer too.

Well, perhaps I'm just stuck in the wrong industry (construction project management/estimating). I do see how someone in certain industries could work out a deal where they'd work part-time for a few years....but it all depends on their talents and what kind of a boss you have. Just from what I skim from various posts here and other comments from random people, I get the feeling that the average corporate slave driver boss wouldn't be too excited at the prospect of having a part-timer in his ranks for various reasons.

Of course, perhaps I'm just in the wrong field? Anyone have any contacts with people who have jobs in industries that are successful at working part-time like that? What types of jobs are they? I'd imagine a lot of the computer software/high tech could be structured like a 'short-term' contract worker where you'd work 8 hours/day, 5 days/week for a few months....but just working 2 days a week for a whole year? Which types of jobs can you do this at, other than $10/hour deli counter slicers at the grocery store (which don't look too terribly bad with their health insurance package...)

Now, I have nothing against the part-time idea. In fact, the more I think of it, the more I'm liking the idea of working part-time starting at between 34-36 for several years, to get in the quasi-ER groove...I'm just trying to figure out which 'decent' jobs there are that would allow it.
--Peter

 

[Danny]

Does anyone else see the glaring "error" (IMO) that the picture assumes?
"Work 2 days a week and collect 40% of your pre-retirement income".
Anyone know where they can get a part-time gig doing their former line of work (or something completely different) at the same hourly/annual rate? I know of none...perhaps I just haven't been barking up the right tree?

Some companies give folks with kids a choice of working at the same salary & benefits reduced to reflect level of work.When I worked at Target there were quite a few women that "job shared". My last job before ER the 2 women on my team were working 3 and 4 day weeks-salaries reduced accordingly. I had kids at home and I worked 5, but 4 of them were telecommute from home and I got 5 weeks vacation it was a good gig, hated to leave but ER was a better deal. The telecommute got me and the family used to me being at home so ER was not a big adjustment.

 

[Mr._johngalt]

I'm not sure what the graph is actually plotting, but part-time work for 5 years will significantly increase your portfolio and SWR as well as buy a lot of insurance against outliving your nest egg.  There are a couple of major factors contributing to the transitional retirement idea:  1) boomers are going to live about 7 or more years longer than those that first established a mid-60's retirement norm.  2) The work of typical boomers is much less physically demanding than the work of those who lived earlier.  Retirement in the past has often come only when people were too frail to continue working.

Although 5 years of work at 40% time is less freedom than full retirement, it certainly provides more freedom and far less stress than a full time job.

As far as the 40% salary for 2 days a week work goes, I have been offered salary in percentage to the amount of time I am willing to spend.  I chose to work only 1/4 time, so I only take home 25% of the full-time Director salary (healthy 6 figures). 

I also think a lot of people derive more than salary from their jobs (maybe not people on this board, but other people).  Some people are motivated by accomplishment at their job, some by their friends and colleagues,  some like to feel like part of a team, . . .  These people are reluctant to retire outright.  Transitional retirement gives them a chance to cultivate hobbies/interests/volunteer efforts outside of work to fill the needs that they satisfy on the job.

Now I fully expect to be blasted for pointing out that some people feel differently than the typical INTJ ER curmudgeon.  That's okay.  I would gladly defend your lifestyle choice against the typical boomer too.   

In 1994, a ripe plum of a job just fell in my lap. Went back to work for 2 years full time and then 2 years part time. For the part time, I worked in Dallas for one week per month. For this I received all benefits, just
like I was still full time, including full travel and living allowance,
bonus, insurance, etc etc, and as I recall I got about 1/3 of my fulltime salary.
The "work" was a slam dunk compared to working for myself for many years.
Truly, as work averse as I am now, I would still be doing that gig and
probably would have continued until I couldn't get out of my wheel chair

JG

 

[Mr._johngalt]

Does anyone else see the glaring "error" (IMO) that the picture assumes?



"Work 2 days a week and collect 40% of your pre-retirement income".


Anyone know where they can get a part-time gig doing their former line of work (or something completely different) at the same hourly/annual rate? I know of none...perhaps I just haven't been barking up the right tree?

See my post above. I switched to PT and actually got a significant per hour
increase in pay. You could never find such a deal if you went looking
for it.

JG

 

[Outtahere]

I've been wrestling with what to do when I retire but I will tell you one thing for sure, I'm not going back to "work" unless I'm forced to. I know there are lots of people out there that love their jobs and would never think of leaving, that's not me .. so hopefully all those wonderful boomers will keep working so I can sit back and enjoy life.

 

[Andre1969]

If you're talking about net income, it might not be that hard to get a part time job where you only work 40% of the hours, but still manage to get 40% of the pay, if not more. Chances are, cutting back from 5 days a week to 2 is going to put you in a much lower tax bracket. For instance, if you were making $50,000 per year, but are now cut back to $20,000, you're going to be keeping a larger percentage of your paycheck.

Also, by the time you've gone part time, you might not be putting into a 401k anymore, either, so that's going to be more money in the paycheck.

 

[P.S.]

Anyone have any contacts with people who have jobs in industries that are successful at working part-time like that? What types of jobs are they?

Specifically, a radiologist who wants to supplement FT income with PT job. PT job of one weekend a month pays $3,000 mortgage for 2nd home. Many fields in medicine are PT-able.

 

[tryan]

Anyone have any contacts with people who have jobs in industries that are successful at working part-time like that? What types of jobs are they?

Perhaps the best way to ensure your PT status is to work for yourself. For example, with the rentals I can take any job I want (to reduce maintenance costs or just to putter ...) or hand the job off to a hired hand.

Admittedly you need to be established in the bussiness before handing over the reins.

 

[MJ]

Now, let's be nice to these "old diggers"-- they're gonna solve all the Social Security & Medicare problems with their tax dollars!

Can I hear an Amen from the forum choir.

 

[justin]

Peter76,

I'm in a related field (transportation engineering). I'm at a small company and we have a semi-retired experienced engineer here that works every day, but is hourly, so he takes off days frequently. He also works less than 8 hours most days. His hourly pay is about what he would get hourly as a salaried 40-hr/wk employee.

I've considered taking this same path in 10 years or so when my spreadsheets tell me I can.

You'd have to find the right fit at the right job. Smaller companies might be more flexible. Dunno. Keep on the lookout when the time gets near and make the transition. If you're highly skilled and experienced in your field, you should be able to negotiate terms to a certain extent. For example, a smaller construction company may need a part timer to do estimates and quantity takeoffs 20 hrs/wk (I guess you do that sort of thing). Project management is very hands-on, but estimates and QTO's can be done part time (assuming a non-time-critical bid).

 

[Patrick]

I'd like to see a similar chart with 6 months or one more year of full-time work to compare with this one.  At least when you're fully retired you can leave and DO things, like travel or move somewhere nice. Seems counterproductive to quit a great job to take a so-so part-time job.