Alternatives to Traditional Retirement
- PotpourriHave you considered the alternatives to quitting work for good?
When I talk about retirement, I usually call it the time when you stop working (just) for the money. My phrasing doesn’t trip off the tongue, but “retirement” is an old way of looking at things. It comes from a time when people worked until they were worn out, and then lived two more years in a Barcalounger before popping their clogs. There are so many other options now, and almost no one just wants to stop and never do anything again. Even the people who want that often change their minds, because they start to feel bored and unfulfilled.
So, let’s go through a few of the alternatives so you can try them on and see what might work for you. You’ll find that they are a blend of paid and unpaid work options, as well as pre-retirement and post-retirement timing. You’ll also notice a fair amount of overlap, but I did my best to tease out the main points.
1. Switch careers: This is for those of you who aren’t feeling it in your current line of work but need to keep working for the money. You might decide to pursue your passion as a career, transition into the nonprofit arena, or start your own business (see #7). A career coach can help you think through these options and get ready for your new adventure. Just be sure to think through any re-training or education and save to prepare for the transition period.
2. Second act: This is very similar to switching careers, but for people who are already retired and want to keep working. You might road test a few ideas first by volunteering or consulting. Again, a career coach can help you explore ideas and prepare you for hiring.
3. Early retirement: This is similar to the traditional mode, but with more saving and/or minimizing of expenses in order to shorten the timeline. What we’re talking about here is some flavor of the Financial Independence, Retire Early (FIRE) approach. I wrote a post about FIRE ages ago if you’d like a quick introduction or refresher. If you want to retire early, you’ll definitely need a strong financial life plan so you know exactly how long you need to work and how much you will spend when you stop, including healthcare costs. You’ve got a long retirement to cover!
4. Sabbaticals/Mini-retirements: You could take several work breaks over a period of time, and then return when you’re refreshed and ready for more. This might help address burnout and let you focus on other things along the way, like family, travel, and side projects. Just make sure you’ve saved enough to support yourself during these periods, including healthcare coverage and long-term disability insurance.
5. Semi-retirement/Part-time work: With this option, you might scale back the time you spend at work, but you don’t stop entirely. You might decide to go part time once you’ve reached your retirement savings goal. Either way, you might stick with what you do now or explore new lines of work that might be interesting. Be sure to plan for healthcare and keep your long-term disability policy in place if you’re not already financially independent.
6. Seasonal work: This is close to part-time work, but you might decide to work only during certain parts of the year. Many businesses need help during their peak seasons or during the holidays, or you might try being a tour guide, camp counselor, event worker, tax helper, or photographer. It all depends on what you’d like to do and what’s available where you live.
7. Start your own business: This might amount to a career switch, but there are a lot of options for when you might do this and how much time you might spend on it. You might start a business while you’re still working, or after you cut down or stop. You could turn your hobby into a job, or do consulting or freelancing. Just make sure you’re not spending your nest egg to fund it; work with your financial life planner to set up safe limits for what you will spend to get your business off the ground.
Now that we’ve looked at some of the options, let’s cover a few quick tips and considerations as you take action.
1. Take care of yourself physically. You and your body are going to be together forever, so be good to it. Eat well, stay active, and keep your mind sharp so you can do all the things you want to do with every ounce of your vigor.
2. Take care of yourself mentally and emotionally. The transition away from your regular working life can be difficult, depending on who you are. If you need help to make that transition, find a therapist or coach. As time passes, keep track of how you’re feeling about your new life and check in every so often to see if you want to make any changes. People grow and evolve during retirement, so be ready for that.
3. Put on your explorer hat. This is your time! Now that you don’t have to work just for the money, the world is your oyster. If you adopt an attitude of exploration, you might consider work options that never would have come up before. Make it fun.
4. Remember that work is only one (potential) aspect of your retirement. Besides exploring new ideas around work, this is a great time to think about your life as a whole. Which relationships, activities, and pursuits will be most meaningful for you, now that you have more time? What else do you want to do, besides work?
5. Check in on your financial life plan every year. Just as you will change, so will your financial situation. At least once a year, it’s a good idea to review your spending against what you’ve saved and what you’re earning to make sure your plan is on track. In addition, you'll want to review your investment allocations, make any necessary changes, and do your rebalancing. This is also a good time to reassess your insurance coverage to see if your needs have changed. Finally, take a quick look at your estate plan. Do you need to update beneficiaries, title any new assets into a trust, or update your will or other documents?
Friends, retirement isn’t a line you cross someday; it’s a wide-open field of possibilities. Whether you’re switching gears, taking a breather, or diving into something brand new, remember that this is your time to explore, connect, and enjoy. This world is bigger than any job title, and your next chapter can be as vibrant and meaningful as you want it to be. Here’s to making it uniquely yours, no matter what form it takes!
