Do You Need To Retire?

Do You Need To Retire

When you reach a certain age – it could be 65 or somewhat older or younger – someone will likely confront you and ask what are your retirement plans or even assume you must be or should be retiring. Retirement for many who either have generous defined benefit pension plans or have saved over the years for just this time can be a very enjoyable experience and this type of life style with travel and leisure built into it can work very well in this case. But this question raises another question anyway which is whether retirement is really necessary for everyone and, by the way, what is retirement? Does retirement mean you stop working for income or that you change careers and become a consultant or you volunteer and work but without compensation or you discover new skills whether you are paid for them or not or something else entirely.

Considered from a financial standpoint the retirement question is something like do you have enough to sustain yourself and the lifestyle you expect for the rest of your life. That can be a tall order. The rest of your life could be until age 70 or age 100 or more. You may have seen the commercial from a financial services firm on TV that shows people walking the distance on a map that demonstrates how long their funds will last. It could discourage some people.

If you have a defined benefit plan from your former employer that will sustain you indefinitely no matter how long you live, the choice is easier than others although inflation has to be taken into account. If you have a 401(k) or 403(b) or simply a fund you consider savings, there is more uncertainty which is why I have come to the conclusion that, for many people, regardless of the amount of their savings, if they do not have a guaranteed income, a check or deposit coming in monthly with predictable certainty, they never quite feel secure. Sometimes substitutes are considered like life annuities to try to build in that security. It can depend on the terms and the product.

An interesting 2011 article from a Psychology Today website by Ronald E. Riggio, PhD of Cutting Edge Leadership, “At What Age Should You Retire,” https://www.psychologytoday.com/us/blog/cutting-edge-leadership/201104/what-age-should-you-retire, discussed retirement from a different perspective entirely posing the question as follows: “Let’s skip the financials of retirement – the question of whether you will have enough money to allow you to retire. Let’s explore the psychology behind your choice to retire (or not), and the impact it can have on your health and well-being. The key questions here are: Will you be happier retired or working? Will you be psychologically and physically healthier retired or working? Are you psychologically prepared to retire? Will you live longer if you retire?…”

It noted there are many cultural myths about retirement including the one previously mentioned about retirement at age 65.

Here are the questions discussed.

  1. Do you enjoy your job? Does it provide a sense of meaning and purpose in your life? If you do, then the author described it as “unwise to retire unless you can replace that sense of meaning with some other activity or passion.” Some people do and then channel that energy into another field, sometimes a related one. In my experience I have seen people merely take a “side trip” like teaching other professionals what they have learned in their field or writing.
  2. If your job is stressful, is it retirement you seek, or a change in careers? The author asks if you are a “working type” or a “creative leisure” type. Do you want to reduce stress or find more satisfying activities?
  3. Does your job provide critical social needs in your life? If your friends are people you know from the job and you do not have a broader close circle of friends who you can take with you into retirement, it could be difficult.
  4. Are you prepared psychologically to retire?  Do you have hobbies or interests that will fill your time? Have you realistically considered what your life will be like as a retired person? If it means sitting home alone watching television that might not work.

All good questions to ask.

About the Author Janet Colliton

Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.

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