The mass media in the United States tends to oversimplify the transition from the career phase to the retirement phase of our lives. Apparently walking into the sunset on a beach or through a meadow leads directly to a rocking chair on a front porch and that is retirement? As many of us know, this couldn’t be further from the truth. The new challenges that we face in the first few weeks, months and years of this new period of our lives can be daunting. The subjective aspects of retirement come with there own set of adjustments such as how to spend the newly-found free time as well as dealing with the acclimation process of primarily being at home and not going to a job every day. The changes can be jarring as careers create community and identity for 30+ years of our lives.   

Financial advisors spend the majority of our careers understanding the financial aspects of retirement; has the client saved enough to sustain through the remainder of their lives, is there a risk that they may “overspend” their plan, and what unforeseen risks may come their way as they navigate the next 20-40 years of their lives. While this is an incredibly important step in retirement planning, it is only half of the equation. How clients chose to actually live their retirement years is the other half of the calculus. The term “retirement” seems somewhat antiquated. Many people who enter this phase of life are still working in some capacity or have chosen a job that more closely aligns with their social interests. Essentially, it is achieving the status of financial freedom to stop working on any given day and not look back. Ultimately, we, at Walkner Condon, much prefer the concept of “work-optional lifestyle” as opposed to “retirement” to better represent how people are living this phase of life in 2023.  

Work-optional lifestyle is simply the point at which someone has saved enough money to comfortably retire, however, they decide to keep working in some capacity. In most cases, people may decide to cut back on hours worked per week or start taking every Friday off. There are many reasons why people continue to work even after reaching a comfortable level of financial freedom – a strong desire to remain a member of their work community, an enjoyment or dedication to their career or a specific project, or simply to stay active and mentally sharp.

This shift of continuing to work once financially free is a massive change from the norm of a couple of decades ago when someone would work at a single company for 30 years, then retire and never even contemplate working again as my grandparents did. In 2000, 58% of Americans aged 65 were retired, however, in 2022, only 45% of 65-year-olds are retired. While some individuals in this age group are likely working out of necessity, many are making the conscious decision to continue employment out of choice. We encourage clients nearing retirement to not only think about how they will occupy their free time, but whether they will continue to be active in the work world. 

We feel that the concept of a work-optional lifestyle is simply a better representation of how people experience this time of their lives. This is a time when people aged 65-69 are more likely to have a job than teenagers. As we know, the dynamics of the retirement phase have changed. People nearing this time of their lives should take a wider view of their interests and be open to the idea that work, by choice as opposed to necessity, may present a rewarding option. We should allow for a more modern approach to retirement. People who live a work-optional lifestyle tend to have more flexibility and feel less restrictive than those who simply define themselves as retired. Let’s hope that this trend continues!      

By: Nate Condon