Different choices in the ‘new retirement’

“Retirement is an opportunity to open a new, active chapter in life.”

Do you agree with that statement? An increasing number of Americans do, and it’s changing their whole approach to later life.

People’s attitudes about retirement have changed. People are looking at retirement as a time to be productive and active in a way that allows them more flexibility and freedom than they’ve had during their working years.

For numerous sixty-somethings, this means staying in the job market but changing their relationship to work, whether with new hours or a whole new career. For others, it means rethinking their retirements entirely – and possibly arriving at very different conclusions.

Increasing numbers of Americans are extending their working years beyond 65. A 2011 Retirement Confidence survey by the Employee Benefit Research Institute found that while only 23 percent of retirees reported working for pay in the previous year, three-quarters of workers said they expected to be employed during their retirement. More people want to keep working in some way. And more and more folks are going back to work after they retire.

The main reason seems obvious: Economic pressures rooted in the recent recession and tight job market has forced some Americans to postpone retirement. Pension plans have become scarce – or unable to deliver the promised benefit due to corporate finance problems, leaving fewer workers with a secure retirement nest egg. And rising health-care costs have prompted some workers to stay in the workforce in order to benefit from an employer-provided health insurance plan.

But others are embracing the prospect of extending their working years. Generational differences are a major reason. The baby boomers have always been a generation that wanted to make a difference and change the world. It’s not in their nature to live unproductive lives, and that’s reflected in how they are approaching retirement.

Statistics point to the desire for fulfillment. The EBRI survey found that 92 percent of retirees working for pay did so because they wanted to stay active and involved. People want to be challenged and, perhaps most importantly, they want to maintain social connections to co-workers and others.

But working longer doesn’t necessarily mean sticking with the same job. Many older Americans are using retirement as an opportunity to start a new career, diving into a completely new field. Others are pursuing more independence in their current field. For example, it’s increasingly common for workers in their 60s to shift to part-time schedules or telecommuting rather than leaving their jobs altogether. It’s common for someone to start a consulting business during retirement, using contacts built up during their career. Others use retirement as a chance to start an entirely new business or focus on volunteer work.

Whether you prefer a more traditional retirement or one that involves a mix of work and leisure during your post-65 years, it’s important to plan early in order to make your vision a reality. Your vision of retirement should be part of your financial strategy throughout your life. If you know that you want to start a business or launch a new career at age 60, your financial strategy needs to accommodate that goal.

Exploring the answers to questions such as “What’s my ideal retirement scenario?” and “What do I need in terms of financial support?” can help you build new choices into your retirement strategy, choices that fit not only the current economic reality but your goals as an individual. Beyond security and independence, what will you pursue during the next phase of your life?

• Patrick S. O’Connor, CRPC, is the Managing Principal, Senior Financial Advisor, PIM Portfolio Manager and a Chartered Retirement Planning Counselor CRPC at Wells Fargo Advisors Financial Network in Algonquin. He can be reached at 847-458-0142, emailed at or at his website

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