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."

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