It is not breaking news people are looking at retirement differently. For many people this means figuring out a way to create a sustainable lifestyle. One where they can live and enjoy life now the way people used to wait until their retirement years. We try to encourage our clients to do more while working than just saving every dollar they can. The reality is none of us knows what the future holds in terms of the markets or our personal lives. This doesn’t mean running out and spending every dollar you make. But, it does mean balancing your lifestyle so you are enjoying the fruits of your labor now and in the future.
The traditional retirement model is becoming extinct. Rare are the days where someone works for a company for 30 years, retires and collects a pension. People switch jobs way more often and most companies do not offer pensions. Couple this with the fact Social Security is likely to look different in the future and you can see why traditional retirement is fading. I think the shift is a good thing. It could easily lead to more small businesses, more self-employment and more freedom for people to control their own destiny versus worrying about what the stock market is doing.
Sustainability in your financial life means redefining retirement. It seems like many people even want to work part time in retirement. This means less retirement savings may be needed. If the assumption goes from an age 65 retirement to an age 55–75 part time retirement, it could mean an “early” retirement from full time work and then an extended period of part-time work. Someone could scratch the traditional full retirement at age 65 and exchange it for a shift from full time to part time at age 55 and work into their 70s.
For this lifestyle to be conceivable, however, you need to have a plan in place of what type of part-time work you will have. Much has been written in recent years about taking your passions and turning them into your career. I think there is a lot to be said for doing this when it comes to a sustainable lifestyle. It could only mean some extra spending money now but could easily be a part time income source for early retirement. Whether it’s photography, consulting, selling items on Etsy or blogging, there are many ways to make extra money outside of your normal job. The key is to find something you love doing and something with low overhead. Everyone wants to own a bar or restaurant but it isn’t feasible.
A sustainable lifestyle is not just about finances. In order to have an active life in your 60s, 70s or later, you need to be healthy. The discussion of what makes us healthy is well beyond the scope of this post but being active and eating real foods can go a long way to making most people healthier. Maybe the most important aspect of being healthy in your later years is the savings in health care cost. Taking care of yourself today will likely mean large savings in the future.