Smart Retiree

Retirement planning doesn't mean much to most 20 Retirement planning wasn't supposed to be like this. Phased retirement has the potential to solve several possible conundrums. One of those is obviously allowing a retiree to keep working in a reduced capacity and bringing in much needed income.

It also allows those retirees who need to work to maintain strong purpose in their lives the opportunity to so. And more importantly, with the exodus of the baby boomer generation from the work force, a lot of valuable expertise will be lost with their exit and phased retirement allows industry to retain this experience.

Each one of the reasons we've highlighted in this article are major issues on their own. Retirement planning is about having a nest egg large enough to sustain one in their retirement years. It's supposed to cover things such as day-to-day expenses, vacation and hobby interests, not to mention leaving some aside for the kids and grand kids.

Western society is at a unique crossroads with the impending exodus of the baby boomer generation from the work force.

Good retirement planning will hopefully pay off for most however, the sad reality is that retirement will only bring possible hardship to many. Why? Simply because most won't have the capital reserves to sustain them through a long and happy retirement.

Are you in this boat? Do the maths...to continue to live at a level you've been used to for so many years means your retirement benefits, whether they be 401k or some other form of investment, will need to have been well planned.

The forecast by economists suggest the labor force participation rate will be higher for those 65 and over than at any time in history over the next few years.

Let's take a look at some statistics. In the 30 years from 1950-1980 the work force was made up of just under 11% of people in the 65 year age group and higher.

In the next 20 years, this figure rose to almost 13%. The forecast for 2015 is that this age group will make up over 16% of the working population.

These figures are not meant to impress you but only to show you that retirement will mean something completely different to the 65 and over generation in the 21st century than it did over 60 years ago.

So why are people working into what is supposed to be their golden years? Did retirement planning factor this in half a century ago? Here are some of the reasons:

- people are living longer thanks to modern medicine
- pension plan changes
- financial needs and hardship
- losing purpose in their lives when they give up work
- economic conditions and
- changes from industrial to an information-based society

Apart from financial needs - of the reasons outlined, boredom in their old age is a major factor why people want to continue to work. Lack of purpose and meaning will see many work in some sort of capacity even if they don't require the money.

In their report on Phased Retirement, the Smart Retiree says..."Work can provide social and psychological benefits that can't be met in retirement years."

So how is your retirement planning looking if you're closing in on retirement age. Do any of the above factors resonate with you?