When is the Right Time to Retire?

Longevity is redefining retirement for baby boomers. Purposeful living is not driven by a magical retirement age. Adviser and author Jeannette Bajalia offers perspective on how to know when it's the right time for you to retire.
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By Jeannette Bajalia

We’re seeing the headlines in numerous publications about baby boomers staying in the labor force at higher rates than previous generations. According to the Pew Research Center analysis, in 2018, 29% of boomers ages 65 to 72 years old were either working or looking for work.

While an interesting phenomenon, it doesn’t make any sense to speculate why these trends should make the headlines. Obviously, if people enjoy their professions, find purpose in their work, are healthy and energetic, why would they want to stop working. To be miserable in your career, sick, and unhealthy have traditionally been good reasons to retire at traditional ages but this may not be the case with baby boomers.

Jeannette Bajalia

Jeannette Bajalia

Now, let’s add longevity to this discussion and see if it doesn’t reshape your mindset.

Longevity is redefining retirement for baby boomers. Many in this generation are seeing their parents outlive their financial resources. I’ve been intrigued by this notion in my life work as the principal and owner of two retirement and financial planning firms. I retired from a corporate career at the age of 55 to pursue a passion to help others create plans to ensure they could retire with success. Now, at my age of 68 years young, I pretty much fit into this redefined category of “retired.”

You see, I was one of the boomers who ended up supporting family members who ran out of money due to longer life spans. And, I exited a stressful career and pursued a career of purpose and passion. So, why stop now? The work I do, as many boomers do, gives life energy so why stop to pursue a traditional paradigm of retirement? But it’s not for everyone, so let’s spend some mental energy on understanding whether you should plan on staying in the workforce, exiting your primary career, or simply re-inventing your next chapter to pursue an interest where purpose, not money, matters.

Here are the typical reasons to exit a career:

· You are co-existing with your employer. In other words, you don’t get excited going into the office to do your work.

· Your career no longer brings you joy or a feeling of high expectation.

· You have a health issue that interferes with your ability to excel like you did previously.

· You’re basically bored and clock watch to get to the end of the day.

· You’re drained by the end of your work day; your job depletes your energy.

· You’re working simply to get to the magical age of 65 years old to get Medicare or a pension benefit.

If any of these ideas resonate with you, then your health could potentially be in jeopardy and you should truly retire. On the other hand, if:

· You continue to make significant contributions to your employer, you mentor younger employees and find great purpose in that, and you can’t seem to take a day off because you’ll miss the energy your job gives you;

· You are a source of knowledge to your superiors and others who seek you out for your intellectual capital embedded in your brain;

· You’re the “go to” person for problem solving and you find great joy in your ability to help the broader team;

· You get a lot of recognition for your contributions to the greater good of the enterprise;

· You’re excited to get back to the office on Monday’s or after a vacation.

If these resonate with you, then a retirement age is not your focus and your health is not jeopardized. Although, if you’re in this situation, we all know all good things come to an end, so what will your next chapter be when perhaps your job is eliminated and you need to move on? These are the qualitative aspects of the world of work and are to be considered separate from the quantitative aspects of your work.

And the money has to have a consideration so let’s talk about that a bit.

In the 60-69 age group, 38% of individuals have less than $100,000 saved for retirement while 36% have between $100,000 and $500,000. So much for the traditional rule of thumb that says a 65 year old who is retiring should have $1 million banked for retirement.

Actually, only 12% of retirees in this age band have $1 million or more saved for retirement. Does this change your perspective on whether you should work past 65 or not? If it doesn’t, it should. Here are the questions you should consider when deciding how long to work:

· How healthy are you and are you working with purpose and passion?

· How much income do you need to sustain an enjoyable lifestyle when you’re not working?

· What will you do in retirement if you’re going to be in retirement three or four decades?

· Have you allocated all the costs you need for routine healthcare; what about long-term care costs?

· What percentage of your lifestyle costs does your Social Security cover?

· What is your tax liability throughout your retirement from all those tax-deferred IRA savings?

· If you’re married, how much income will need to be replaced if a pension and/or a Social Security benefit was out of the equation? Also, have you considered the tax impacts for the survivor when you move from a married filing joint tax return to a single tax return?

· How will you continue contributing to a life passion if it was not associated with your primary career?

These are simply some ideas to get you thinking. Purposeful living is not driven by a magical retirement age. This is a myth and doesn’t exist. A career can have a purpose, planting gardens during retirement can have a purpose, reinventing yourself to pursue a lost passion for the arts, for painting, learning to play an instrument, writing your first book, etc. It’s a personal definition of retirement but in my professional experience, and interviewing over 35 men and women over the age of 90 as described in my book, Planning a Purposeful Life, the traditional definition of retirement and when to stop working, is as archaic as encyclopedias.

If you want to work past 65, JUST DO IT for the right reason. If you want to pursue a new chapter and career at 65, JUST DO IT because the best business ideas and socially responsible contributions are yet to be conceived and created. And, if you want to retire to the Caribbean or to the mountains at 65, JUST DO IT! Pursue your passion with vigor and vitality and I’ll see you in the 100 year old club.

About the author: Jeannette Bajalia

Jeannette Bajalia is an author of four books, radio personality, president and owner of Petros Financial Group and president and founder of Woman’s Worth®. She has over 40 years of experience as a business professional, and specializes in ensuring individuals have a retirement plan that allows them to be more emotionally, medically, and financially secure. She is a member of Ed Slott’s Master Elite IRA Advisor network. Jeannette is also a radio personality and radio host of the Woman’s Worth® program.