Working life goes on for serial retirees

Got retirement? Maybe not. After reshaping the social and political landscape during the past 40 years, baby boomers are now in the process of redefining retirement. Whether voluntarily or involuntarily, 50- and 60-somethings are repackaging themselves in second, third or even fourth careers for a variety of reasons, including financial necessity, creative choice and boredom.

The boomers are caught in a confluence of factors driving the re-creation of retirement: the disappearance of lifetime employment, the weakening of the retirement social safety net, skyrocketing health costs and increasing life spans. What all this adds up to is the death of traditional retirement.

If you retire at age 65, the traditional retirement age, you're likely to live for 15 to 20 more years, depending on your gender and health. Many will live longer. By working longer -- either in your career of choice or at some other job -- you can make important strides toward financial self-sufficiency in retirement because you're delaying drawing on the funds you've saved for retirement. Also, those funds have a chance to compound over a longer time.

"With the boomers, we've got 78 million people who have to think about what they are going to do in the next phase of their lives," says Brian Drum, chief executive officer of Drum Associates, an executive search firm in New York City. "They are going to have to focus on what skills they have that are transferable to another job -- many will need to continue to work to fund their retirement. At the same time, there is a coming shortage of trained people in the work force, so employers are going to have to think about what they can offer older workers to keep their skills."

Employment and retirement
Formerly, retirement was seen as a three-legged stool: a company pension, your savings and Social Security. The analogy is still valid, but the legs are different: your savings, your employment income and Social Security. The good news is that coupled with a disciplined savings plan, working in retirement for five to seven years or longer can substantially increase the likelihood that your money will outlive you instead of the other way around.


The bad news is that if you haven't already saved much, working part-time for even five to seven years in retirement won't help that much. You'll need to work full-time for as long you can and probably lower your post-retirement standard of living so you won't outlive your savings.

That said, your individual situation is likely to be quite different from your neighbors' or co-workers' situations, so it's important to get a handle now on the various scenarios you may meet as you continue to wend your way toward retirement, says Mark LaSpisa, a certified financial planner with Vermillion Financial in South Barrington, Ill.

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