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Should We Reconsider What “Retirement” Means?

Money Matters

      

presented by Vision Financial

An executive transitions into a consulting role at age 62 and stops working altogether at 65; then, he becomes a buyer for a church network at 69. A corporate IT professional decides to conclude her career at age 58; she serves as a city council member in her sixties, then opens an art studio at 70.

Are these people retired? Not by the old definition of the word. Our definition of “retirement” is changing. Retirement is now a time of activity and opportunity. Generations ago, Americans never retired- at least not voluntarily. American life either agrarian or industrialized, and people toiled until they died or physically broke down.

German Chancellor Otto von Bismarck often gets credit for “inventing” the idea of retirement. In the late 1800s, the German government set up the first pension plan for those 65 and older. When our Social Security program began in 1935, it defined 65 as the U.S. retirement age; back then, the average American lived about 62 years. By the 1970s, you retired in your early sixties, because your best years were behind you and it was time to go. You died at about 72 or 75. In between, you relaxed. If you lived to 81 0r 82, that was a good run. Turning 90 was remarkable. Today, baby boomers cannot settle for these kinds of retirement assumptions. This is partly due to economic uncertainty and partly due to ambition. Retirement planning today is all about self-reliance, and to die at 65 today is to die young with potential of one’s “second act” unfulfilled.

One factor has altered our view of retirement more than any other. That factor is the increase in longevity. When Social Security started, retirement was seen as the quiet final years of life; and now, it is seen as a decades-long window of opportunity. Working past 70 may soon become common. Some baby boomers will need to do it, but others will simply want to. Working full time or part time not only generates income, it also helps to preserve invested retirement assets, giving them more years to potentially compound. Another year on the job also means one less year of retirement to fund.

Perhaps we should see retirement foremost as a time of change- a time of changing what we want to do with our lives. According to the actuaries at the Social Security Administration, the average 65-year-old has about 20 years to pursue his or her interests. Planning for change may be the most responsive move we can make for the future.

-Bill Dowell 

Vision Financial Group, Inc.

4505 Pine Tree Circle, Birmingham, 35243

205-970-4909, www.vision-financialgroup.com

 

 

This material was prepared by MarketingPro, Inc. Investment Advisory services offered through Investment Advisors, a division of ProEquities, Inc., a Registered Investment Advisor. Securities offered through ProEquities, Inc., a registered broker-dealer and member of FINRA & SIPC.  Vision Financial Group, Inc. and West Alabama Bank are independent of ProEquities, Inc. Securities and insurance products offered are not bank deposits, have no bank guarantee, are not FDIC insured, and may lose value.

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