This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Introducing the 'Practice Retirement'

BOSTON (TheStreet) -- A downbeat drumbeat these days is that many will no longer be able to retire when and how they planned.

Because of rising costs and a longer lifespan, making money last means staying on the job longer for many who might otherwise have retired well before 70.

Here's an unconventional pitch: Stop saving and try a "practice retirement" while you're still working.

T. Rowe Price (TROW) is advising a unique -- and fairly counterintuitive -- strategy for plotting when to stop working. Keep working, they tell some clients, but parlay those paychecks immediately into the big plans and simple pleasures you always wanted for your later years.

Vacations? Golf? Sailing? Enjoy it all now, rather than postponing your dreams for years to come.

Christine Fahlund, a T. Rowe Price senior financial planner, describes it as a "practice retirement." She goes so far as to suggest one can even stop contributing to retirement plans once reaching 62 (or even as young as 60), so long as a nest egg remains untouched and living expenses and indulgences alike are funded from salary.

"If you are down and out and feel that the world is crashing around you, that you are never going to get to enjoy your 60s the way you counted on, there's hope," she says. "Start to think about starting to try out, and enjoy, your 'retirement' while you keep working."

"Here you are, age 60, you see that you haven't quite saved enough and envision having to stick around the work force and save, save, save so that, maybe, by 66 or 68 you get to have some fun, but even then it doesn't look likely," she adds. "We are saying to forget about that. Keep that nest egg that you have accumulated, even if it is not enough. Keep it invested in a well-diversified portfolio with 50% in equities, maybe even a little more, and let that ride while you start using some of your salary to have fun. Maybe you even stop contributions for a while to retirement accounts. The key here is that you keep working, but start enjoying yourself, be creative and try out new things."

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,113.54 +61.81 0.36%
S&P 500 1,983.53 +9.90 0.50%
NASDAQ 4,456.0160 +31.3120 0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs