Tag: retirement

Required Minimum Distributions (RMDs): Rules Investors Should Know

Published in: Resources |

The end of the year is usually when retirees have to take their required minimum distributions (RMDs). However, this year, seniors don’t have to take them. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law in March 2020, allows anyone to forgo the usually mandatory annual withdrawals from their retirement savings.

The CARES Act waives the rules for RMDs for the 2020 tax year, but it’s still important to understand the ins and outs of RMDs. Here, we answer some frequently asked questions:

FAQ About RMDs

1. Why do RMDs exist? Is it just to prevent investors from deferring paying taxes on retirement assets indefinitely? 

Traditional IRAs and other retirement accounts such as 401(k)s allow taxpayers to contribute pre-tax earnings that can grow tax-deferred until withdrawal. The required minimum distribution (RMD) ensures that these earnings are eventually taxed. The required distributions are calculated based on life expectancy so that the account is gradually depleted over the lifetime of the taxpayer.

2. How does the SECURE Act change the initial age threshold for RMDs? Is a good or bad thing for investors?

Previously, account holders were required to begin taking RMDs in the year they turned 70.5 (with a deadline of April 1 for the first RMD only). The SECURE (Setting Every Community Up For Retirement Enhancement) Act, which passed in December 2019, allows those account holders who have not yet begun distributions to delay their first RMD until the year they reach age 72. The delay will afford investors additional time for tax-deferred growth, as well as postpone the inevitable tax bill.

3. How do RMD deadline rules work for a 401(k) vs. an IRA?

The SECURE Act also delays RMDs to age 72 for 401(k)s and other defined contribution plans. There are some exceptions for people who continue to work beyond age 72.

4. Can you offer some strategies to avoid the penalty for not taking RMDs on time?

If you fail to take your RMD on time, the penalty is 50% of the RMD amount. Set a reminder for yourself to take your first RMD, as you would for any other significant obligation.

You can take your RMD at any time during the year, so you may choose to take your distribution early to avoid a last-minute scramble. Some people break the distribution into monthly payments, or take a lump sum early in the year as part of their tax preparation process. One of our clients, for instance, likes to take the distribution on their birthday to celebrate all of their disciplined years of saving.

5. Is there ever a scenario where a Roth account would be subject to RMDs?

RMDs are not required for Roth IRAs. Withdrawals from Roth IRAs are not taxable because the contributions were made from earnings that had already been taxed. The IRS has no incentive in requiring distributions.

The only scenario in which RMDs apply to a Roth IRA is if you inherited it from someone who wasn’t your spouse before 2020. Before the SECURE Act, non-spouse beneficiaries of traditional and Roth IRAs were required to take RMDs based on their lifetime. However, now that the SECURE Act is in effect, those beneficiaries must withdraw the full balance of the IRA within 10 years, whether it’s a traditional IRA or a Roth IRA.

6. Are there any other rules to know about taking RMDs?

If you have multiple IRAs, you must calculate each account individually, but you can take your total RMD amount from just one IRA or a combination of IRAs.

If you inherit an IRA or a 401(k), you can no longer stretch the RMDs from those accounts over your lifetime. Beginning in 2020, non-spouse beneficiaries of inherited IRAs will be required to distribute the full balance of the account within 10 years. This applies to Roth IRAs as well.

A strategy for reducing the tax impact of an RMD is to use a portion of the distribution to make a qualified charitable distribution (QCD). The amount of the QCD is excluded from your taxable income up to the amount of the RMD and not in excess of $100,000.

Have Any Other Questions About RMDs? Reach Out to Our Team

At The Humphreys Group, we’re passionate about helping investors gain financial confidence and own their financial power. And that starts with knowledge. If you have any other questions about RMDs and the rules for this year due to the CARES Act, reach out to our team today.

How Pre-Retirees Can Build a Rewarding Retirement

Published in: Resources |

Our world looks drastically different from the days when our parents were planning for retirement. With longer life expectancies and re-visioning of later life, many people plan to keep working during retirement. In fact, a Merrill Lynch and Age Wave study, “Work in Retirement: Myths and Motivations,” found that over seven in ten pre-retirees say they want to work in retirement.

We don’t have to follow the outdated views of retirement from popular culture that if we’re rich, “we should spend our days playing golf, cruising and spoiling our grandkids,” or if we have a more modest income, “we should spend our days in front of the TV, knitting scarves and, if we are especially active, gardening.” Today, we have the freedom to create our own rules of retirement. We each get to choose which rules to break, which to adapt, and which to embrace.

The Merrill Lynch study included this diagram to show how retirement has changed:

Source: “Work in Retirement: Myths and Motivations,” A Merrill Lynch Retirement Study conducted in partnership with Age Wave

 

Creating a Fulfilling Retirement On Your Terms

So how can we build a retirement that is best for our specific situation? Here are some tips from our team:

  • For many of us, our busy work lives have simply provided the template for busy retirement lives. The “busy ethic” is alive and well in our culture. Before you fall into a familiar pattern, take a minute to be sure you are considering all possible paths. Ask whether your chosen approach is satisfying your deeper desires before forging ahead.
  • Give yourself a break! Many of us have charged hard through careers and are now (finally) more apt to stop and smell the roses. But that guilt in the back of our minds can be difficult to banish. Simply letting go of social expectations, the “shoulds,” is easier said than done. Why does it have to be a guilty pleasure? Can’t it just be a pleasure? Go easier on yourself during this transition.
  • Gain insight into the specific learning, work, and leisure activities that are especially meaningful to you. Try this exercise: Complete the following sentences quickly, filling in the blanks with the first word or words that come to mind.
    • I have always wanted to learn more about…
    • When I have free time, I most enjoy…
    • What I like most about my current job/activity is…
    • What I like least about my current job/activity is…
    • When I review my own life story or history, the learning experience that was the most meaningful or interesting to me was…
    • When I review my own life story or history, the work (paid or volunteer) experience that was the most meaningful or fulfilling to me was…
    • When I review my own life story or history, the leisure experience that was the most meaningful or enjoyable to me was…
  • Lastly, write down a list of things that get you out of bed every morning.

Retirement Planning with The Humphreys Group

If we could add an item to our clients’ collective wish list it would be this: find a new, better, less stigmatized name for retirement. Though clients have technically reached retirement, they haven’t retired. There is nothing retired about any of them! So, when our work “outside-the-home-for-pay” stops, what do we do? Do we reinvent? Redesign? Retool? Re-envision? Recreate? Reengineer? Rejuvenate? Relax?

Whatever you call it, we’d like to help you craft a fulfilling, engaging, and meaningful retirement. Reach out to The Humphreys Group today for a complimentary introductory call.

Why 401(k) Plans Aren’t Enough to Prepare Women for Retirement

Published in: Resources |

Contributing to a 401(k) has become the primary way most of us save for retirement, and perhaps the most important rule of thumb in finance has become “max out your 401(k) funding!”

But these plans, on their own, are woefully inadequate for financially sustaining retirees throughout their lifetime. Worse yet, they’re especially insufficient for women. We’re sorry to say it, but the conventional notion that a 401(k) plan will set up women for retirement success is a myth.

401(k) Plans, By the Numbers

When we say that 401(k) plans are inadequate, we’re not kidding. Women are 80 percent more likely than men to be impoverished at age 65 and older, and three times more likely to be living in poverty between the ages of 75 and 79.

And while common sense tells us we should counteract this by simply contributing more to our retirement accounts, well, we already are.

A recent Vanguard study found that women are 14 percent more likely to voluntarily participate in a 401(k) plan. We also save more than our male co-workers (7 to 16 percent, depending on the income level), yet still end up with significantly less in our retirement because we earn less than men. While the average male employee enjoys a 401(k) balance of $123,262, the average female employee has only $79,572.

According to Vanguard, the gap in retirement savings essentially disappears after controlling for the income gap, but unfortunately, that won’t happen anytime soon. Experts say we likely won’t see wage equality until at least 2059.

Why Women Are More Vulnerable to Financial Hardship in Retirement

Even if we did live in a perfect world, where we receive equal pay, there are a host of other reasons why women are still more vulnerable to financial hardship in retirement.

  1. Most obviously, we live longer. Life expectancy for women is currently approximately 81 years, compared to 76 years for men. That means we not only have to afford the cost of living for a longer period of time but are also burdened with much higher health care expenses, which increase with age. And because health care costs show no signs of slowing down, younger women will have an even steeper hurdle to jump.
  2. A more insidious factor endangering women’s retirement is our tendency to take on caregiving responsibilities for our families. Women make up two-thirds of all caregivers, and while some are able to balance this responsibility with maintaining their day jobs, they are often forced to take time out of the workforce. Women who quit their jobs to care for children or elderly family members lose an average of $324,000 in wages and benefits over their lifetime. Even if they decide to work part-time instead, they don’t do their retirement savings any favors — part-time employees are rarely eligible to participate in a 401(k) plan.

Even if women do “play by the rules” and diligently contribute to their 401(k) plans, the likelihood they’ll enjoy a worry-free and comfortable retirement remains slim.

Our Advice to You

While it’s easy to view women’s retirement years in bleak terms, there are some small steps we can take today that will change our outcomes for the better. 

Spend some time really visualizing what you expect retirement to look like. Where will you be living? How might your lifestyle change? What will a typical day look like? Answering these questions will inform what exactly you’re saving for — and perhaps it will motivate you to increase your contributions to achieve your goals.

Invest in a reality check. Work with a financial advisor to crunch the numbers to see if you are on track. Armed with your financial data and some well-considered assumptions, you can get a realistic idea of where you stand now and devise a plan to make the course-corrections that work best for you.

If you have access to a 401(k) plan, you should absolutely contribute, at least enough to equal your employer’s matching contributions. But it’s never too soon to start supplementing your savings with a health savings account (HSA), a traditional IRA, or a Roth IRA. If you’re self-employed, consider supplementing with a SEP IRA.

Consider obtaining long-term care insurance, especially if you have a family history that indicates you may experience health challenges later in life. Such policies can be costly, yes, but they can make a world of difference.

Want to learn more about retirement planning? Reach out to The Humphreys Group team today.

Reflecting on 2019: How Women Rewrote the Rules

Published in: Resources |

Over a year ago, the team at The Humphreys Group sat down and concretely asked ourselves:

  • If we made women’s unique strengths, concerns, and preferences the financial norm, what would we see?
  • What would happen if we flipped the narrative? What if we designed the world of personal finance, using the strengths and preferences of women as our starting points?
  • What if those strengths and preferences were seen as the advantage that they are, rather than something the status quo needs to somehow accommodate or tolerate?
  • If we were to create a financial services firm that was designed for and addressed the needs of women, what would it look like?
  • What would it look like to “do money” like a woman?

In asking ourselves these questions, my colleague Hallie Kraus and I came up with the book, “Rewriting the Rules: Telling Truths About Women and Money.” In it, we identified 10 myths that have permeated our society for way too long. These are:

1. Men are better investors than women.

2. Emotions and personal values should be kept separate from money and investing.

3. Women are more risk-averse than men.

4. Women lack confidence when it comes to money.

5. Women are less interested in investing.

6. Women are less knowledgeable about math and investing.

7. Women need extra help understanding their finances.

8. Women can’t save because they spend money irresponsibly.

9. Women will save enough for retirement if they set up a 401(k) and play by the rules.

10. We should focus our time on fixing the gender income gap, not the wealth gap.

After defining these harmful myths, we dispelled them. We rewrote the rules:

1. Women possess all the qualities needed for long-term investment success.

2. Empathy and expertise both have a place in money matters.

3. Women have a healthy appetite for investment risk, but they’re more mindful about what the dangers are before diving in.

4. Women take time to reach well-informed decisions regarding finances.

5. Women are more ready than ever to carve out their place in the world of investing.

6. Mathematical expertise is not an innate characteristic; it’s a skill set that improves with effort and practice.

7. Women are taking initiative, proving they do not need to be coddled and cajoled into understanding their finances.

8. Women are powerful consumers with ample spending power, and we need to treat them as such.

9. 401(k)s won’t cover everything — women need to diversify their retirement portfolio.

10. The income gap is not the only thing hampering women’s financial mobility. Another alarming disparity is the wealth gap. And we need to fix it.

The financial services industry was built by and for men, and the institutions that created the status quo have excluded women from the conversation. We must start talking about women and money in an unapologetic and unabashed way — women already possess the financial knowledge and confidence to succeed.

For our part at The Humphreys Group, we will continue to address the challenges our clients face, encourage them to venture outside their comfort zone, and empower them to recognize the strengths they already possess, in finance and beyond.

We invite you to help us change the conversation. You can get your free copy of the book “Rewriting the Rules: Telling Truths About Women and Money” at humphreysgroup.com/women-money-myths.

Retirement or College Tuition: Which Goal Comes First?

Published in: Resources |

Saving for retirement versus paying for college tuition?

For those of us who are parents or legal guardians of school-age children, this is one of the most loaded questions we ask ourselves during our professional lives. At The Humphreys Group, we realize the answer isn’t necessarily clear cut: Is it “either/or”? How about “both”? Additionally, underlying myths and incorrect assumptions about women’s investment abilities may influence the choices our clients consider when grappling with this question.

Our advisors have written extensively about our belief that women possess unique financial, investing and goal-setting skills. We encourage our clients to explore their life and work values, in ways that will help inform both their personal and professional long-term goals and strategies. This includes those that relate to saving for retirement and paying for college.

As you aim for success in your financial planning — specifically your own retirement, your children’s college or both — we offer these additional action steps, and recommend you continue discussing your long-term financial strategy with your advisor:

Explore multiple ways you (and your children) can pay for college

This includes savings plans (ESAs, 529 plans and others); loans (government and private sector); grants; scholarships; on-campus work-study programs and off-campus part-time employment.

Understand how you will afford retirement

Retirement lasts many years longer than the typical amount of time it takes a child or children to finish college. As the amount of money parents contribute to higher education costs continues to rise, it is increasingly important to know just how your retirement may be affected if you shift some of your savings toward paying for college.

Keep doing your math homework

Other advisors stress the importance of calculating accurate estimates of both retirement costs and higher education expenses — and doing so with your potentially college-bound children as they prepare for life after high school. Should they choose the college-route, it will help them make decisions about the schools they’ll apply to. And while they are on that path, continue to discuss finances (annually at a minimum) to help them manage any education debts they personally acquire along the way.

Make informed decisions about your priorities

Many advisors note you can save for both retirement and college. But they stress the reality that money is a somewhat finite resource for most of us; at some point, either retirement or college will naturally become a priority. Suggestions include funding 401(k) plans for employer matches and contributing the cash boost that comes from any raises toward retirement, while also establishing a college savings plan for your child to which you and other family members can contribute.

Questions about retirement and college savings are not particularly easy to answer. Financial subject matter experts have much to say on the subject, and many people wrongly assume looking out for yourself in your later years means you are selfishly putting your own well-being before your child’s. But at The Humphreys Group, we believe the answers you find and whatever strategies you develop should belong to you. They ultimately should also empower you.

Our experienced advisors are unwaveringly confident in our clients’ abilities to clarify their values and determine their priorities so that they can undertake investing behaviors that help them meet their goals. Contact us today to learn more about how we can help you approach saving for retirement and paying for college with a strategy uniquely your own.

When Your Career Conflicts With Your Values, Where Do You Turn?

Published in: Resources |

The American author, Annie Dillard, once said: “How we spend our days is, of course, how we spend our lives.” For many of us, our careers comprise a significant portion of our time, which means our work is integral to how we live our lives day in and day out.

At The Humphreys Group, we are fueled by the work we do for our clients every day. Our advisors are inspired by a set of shared core workplace values to do their best, and we consistently encourage our clients to establish the values that guide their professional, personal and financial goals.

But what if your career no longer fits your values? What if you’ve lost a sense of purpose or direction in your work? What if you don’t feel the connection to your career that you once did? What if you lack the motivation that has driven you in the past?

Given that women today will sustain diverse professional lives and increasingly seek active retirements, this phenomenon is more common than many of us may realize. The first step toward improving the situation is to begin by examining one’s intrinsic and extrinsic goals and values.

Intrinsic values are those unique and personal factors that motivate individuals and contribute to their feelings of fulfillment at work (i.e., improving lives, creative expression, mentoring role, etc.). Conversely, extrinsic values are those that relate to the tangible rewards of employment and one’s specific workplace (pay and benefits, influencing the industry, collaboration, innovation, etc.). Having a strong understanding of your intrinsic and extrinsic values will allow you to better pinpoint what your career may (or may not) be missing, and how you can better fuel what drives your need for purpose and security.

Next, we turn to other experts who offer suggestions that help individuals explore their goals and values; develop a stronger sense of at-work purpose; clarify their career direction; and foster long-term financial security. These suggestions include:

  • Identifying your core values and determining how they influence or fit your current career and goals. This list may help.
  • Examining your organization’s values. This list may help.
  • Seeking overlap between your values and your workplace’s values. This can help you develop a plan to nurture those connections at your current job and strengthen your career goals.
  • Consider whether a workplace or career change may be necessary. Sometimes an individual’s career and goals no longer fit their values, and it’s better for all involved to re-align.

The values we have established at The Humphreys Group guide and strengthen our daily work, our company goals and our client relationships. We welcome the opportunity to help you do the same. Contact us today for assistance with developing strategies that ensure your values are supporting your goals — at work, in life and with your finances.

4 Misperceptions About Life in Retirement

Published in: Resources |

As many people live longer and healthier lives, we’re witnessing a move from traditional, “sit-back-and-relax” attitudes about retirement, toward “use-it-or-lose-it” approaches. What accounts for this significant shift in how we plan to live our later years? Cyn Meyer, senior wellness coach and founder of Second Wind Movement, explains that many of us are thinking differently about retirement due in large part to what we are learning about the physical, mental and social aspects of aging.

This more nuanced mindset is especially valuable for women, who often feel more satisfied as the weight of various personal and professional responsibilities lessens with age — and who, researchers note, are emotionally and socially well-equipped to handle the challenges of aging.

Meyer explores four misperceptions about aging and retirement, and in doing so encourages people to think deeply and broadly about their later years:

Retirement years are meant for rest and relaxation. While true to a point, Meyer cites research that demonstrates people in their 50s and older are continuing their educations, beginning new personal relationships and reshaping themselves professionally. Looks like retirement is also a time to get up and go — in a new direction!

Depression, loneliness, anxiety and dementia are unavoidable during the retirement years. Meyer acknowledges multiple instances of inevitable physical decline linked to aging, including: eye trouble, hearing loss, diminishing mobility and balance, declining mental stamina and increased fragility due to lower bone/muscle mass. And yet, she also points out that assessing and increasing our social, professional and educational interactions and involvements as we move toward retirement may help offset potential emotional or mental challenges for individuals later in life.

Retirement puts an end to learning opportunities. Hobbies, skills and high-level thinking about complex issues all help keep the brain healthy, engaged and flourishing. Meyer highlights research that details how people build neural pathways and forge new connections in their brains throughout their lives. In dispelling this misperception about aging, Meyer also encourages people to understand that learning is a key aspect of staying holistically fit in retirement.

We have little control over most aging factors. Healthy environments, lifestyles and daily behaviors — elements individuals can control — help balance influences from factors we can’t control such as genetics, pre-existing medical conditions and the “normal” limitations that come with aging, according to Meyer. She stresses that retired individuals should develop good habits and steady routines as they approach retirement to help ensure they are able to continue to achieve their goals and dreams for years to come.

We are living longer, healthier lives, and research supports a new outlook on retirement in the 21st century. While we all will experience physical, emotional and mental changes with age, individuals — and women, in particular — can take steps to get the most out of their post-work years by remaining physically active, mentally stimulated and socially and emotionally engaged.

Contact The Humphreys Group to discuss what’s important for you to experience and accomplish in your retirement years, and to learn how we can provide financial planning support for your 21st-century retirement mindset.

Why You Should Take a “No Rules” Approach to Retirement

Published in: Resources |

“What would you do if you knew you could not fail?” goes the old saying, a fitting question for women facing retirement in the 21st century. We have spent decades helping redefine workplaces, and changed the landscape of the modern work world by making inroads toward an array of jobs few women in previous generations were able to access, via roads often rockier than ours. As part of a generation that can expect longer and likely healthier retirement years, it’s never too early to ask ourselves what we want those years to look like.

Given that most retirement role models of the past were men (who seemed to relish their move from work by devoting their days to leisure activities and hobbies, tinkering around the house, sitting in front of the television or traveling to sunny climates), many women have had few examples and no clear expectations of how to experience their retirements, outside of continuing to be caretakers and homemakers.

What a difference a few decades make!

For most women, the plans or expectations we had when we were younger about what it would be like to age — into our 50s, 60s, 70s and beyond — have changed. While previous generations could expect to work in a single field at a single career, then retire and begin the process of slowing down mentally and physically, many women today have opportunities to delve into “encore careers.” They are re-inventing themselves in their professional as well as personal lives — and redefining retirement on their terms.

As women live extended life spans and spend more years in good health, we are more active, more productive, more engaged, more employed and more employable than previous generations have been. Studies show our levels of activity help us enjoy retirement more, with fewer unspoken rules that limit us in what we’re doing during those years or restrict how we’re doing it.

Consider this question to jump-start your thinking about your retirement experience: What do you want your life to look like in 10 years? 20 years? 30 years (not so farfetched, as financial planners are increasingly projecting client lifespans of 100 years)? Do you want to work? Travel? Get more education? Will you be a caretaker? A volunteer? A mentor? Will you embark on a new career or creative project? How busy do you want to be? Who do you want to be to and for others? Who do you want to be to and for yourself?

We spend the bulk of our working years being shaped, or even limited by, social constructs, norms and expectations regarding what we can and should do. We also, whether we’re aware of such behaviors or not, may constrain ourselves by maintaining well-worn thought patterns and adhering to familiar behaviors. We do this to preserve continuity and order in our personal and professional lives; we can only do this for so long before our habits risk becoming entrenched.

As we age, we have opportunities to loosen our maintenance of our status quo outlook. We bring more wisdom to our jobs and our lives. We have experienced a variety of life’s triumphs and trials. We’ve gained resilience. We’ve also widened our perspectives about the world and ourselves: we know who we are and what is important to us.

We at The Humphreys Group suggest you face the challenge of creating a new construct regarding the retirement phase of your life. Reach out to work with our advisors as you continue to ask questions that matter to you. Resolve to make your own rules, and become your own role model for making the most of your retirement years. We are here to wonder with you, as the poet Mary Oliver wondered: What is it that you plan to do with your one wild and precious life?

How to Plan Your Retirement Journey

Published in: Resources |

For most generations, retirement has long been considered a leisure-filled “destination” that professionals reach after decades of hard work. However, it’s becoming clear that retirement in the 21st century is less about reaching retirement and more “about the journey” through it once you’re there. How prepared are you to enjoy your retirement journey?

Research continues to show that many retirees are living longer and remaining engaged in a variety of activities during retirement; in fact, when building retirement plans, some advisors now calculate clients’ life expectancy to reach 100 years.[1] That means we at The Humphreys Group recommend our clients not only examine their fiscal strategies when thinking about retirement; we also encourage clients to take a fresh look at what they envision for themselves when they ease out of their workplace lives and professional responsibilities.

Since women still need to pay careful attention to the details of how they will afford a long-term retirement, we take a two-part approach when examining their journey.

First Look: Finances

Studies show women tend to retire earlier than men, may be less familiar with the “big picture” of family finances and may not have saved or invested as much for retirement as their male counterparts have. We initially advise women who are preparing for retirement to spend time on their financial plans by taking these steps:

  • Assess savings, spending and debt
  • Increase financial literacy and understand how best to diversify your portfolio(s)
  • Research affordable health care options, since retirement can include a greater need for medical care
  • Determine how and when to access retirement funds

What’s Next: Retirement’s Fun Factor

Once clients have made their financial considerations, we support their plans to fully engage in their journey through their retirement years by asking questions such as:

What skills and abilities would you like to sustain and share after retiring? We prompt clients to consider teaching, mentoring or volunteering in their professional field(s) so they can pass along well-earned knowledge and experience to younger professionals in their networks.

What activities and interests would you like to renew or explore in retirement? With the time and freedom that come with retirement, we encourage women to feel empowered to expand their boundaries of what they want to do. What do they dream of? Clients make plans that include traveling, taking classes or working part-time to earn supplemental income as they explore fields that reflect their personal (not professional!) interests.

How will you commit to an active lifestyle in retirement? While keeping each individual’s unique abilities in mind, we support our clients’ steps to embrace and engage in activities that bolster their physical health, mental fitness and social connections as they age.

Like many aspects of modern life and work, today’s retirement experiences look and feel different from those of previous generations. Following years of dedication to their professional lives, women in particular stand to experience retirement in exciting and innovative ways. Our advisors work to ensure our clients are prepared to reach that destination with both financial security and the ability to enjoy the journey through retirement for years to come. Contact us if you have questions about your retirement plan or need a second opinion on your approach.

[1] Katie Robertson, “Why the World Needs to Rethink Retirement,” The New York Times, December 4, 2018, https://www.nytimes.com/2018/12/30/business/retirement/why-the-world-needs-to-rethink-retirement.html, accessed January 2019.

What Does It Mean to Maintain an Active Retirement?

Published in: Resources |

For many professionals, retirement used to mean a complete end to work and the start of unfettered leisure time. But recent data show many adults are taking a different approach to their retirements by exploring a number of options available to them in today’s complex and complicated work world.

We continue to unpack information from the 2014 Merrill Lynch study, Work in Retirement: Myths and Motivations, and learn that many individuals now embark on a more nuanced, four-phase retirement process: pre-retirement, career intermission, re-engagement and leisure. Even more specifically, it’s interesting to note another set of data, which indicates women tend to experience and engage in retirement differently than their male counterparts.

The Merrill Lynch study rejects the myth that retirement is a time of declined engagement and instead outlines how individuals begin to prepare — ahead of retirement — to incorporate work and other activities into their post-career lives. According to the study, as many as 54% of pre-retirees who want to work in retirement start to make plans two years before they retire (pre-retirement).

Almost 70% of the Merrill Lynch subjects who scheduled a break (career intermission) between their careers and post-retirement work said they did so to allow time to “recharge and relax” from work responsibilities. While this can be a risky course of action — older workers can be perceived as out of step and out of touch with business networks, industry trends and evolving technologies; it may take longer to find employment as an older and retired worker — most are able return to the workplace in ways they seek, with the added bonus of increased work-life balance and flexibility (re-engagement). Eventually, as they advance in age, many of those surveyed embrace their earned leisure time as the final phase of their retirements.

But the 2016 Forbes article by Richard Eisenberg, “Retirement Life: Men and Women Do It Very Differently,” highlights a 2016 TIAA study that discovered women take on more diverse activities than men when it comes to work and play during their retirement years. According to Eisenberg, the TIAA study found that men are slightly more likely to give their time to sports-related activities or remain close to traditional work-related environments (through consulting, teaching/mentoring or part-time work). Retired women stay almost equally involved with work-related environments, but also give their time to volunteering, care-taking and engaging in learning and creative opportunities, as well as staying physically and socially active.

These studies — and what they reveal about how 21st century professionals approach work and retirement — are food for thought for women at any stage of their professional careers. You’re putting time, effort, skill, focus and dedication into doing your best at the work you do. Why not also put some of those energies toward getting ready for your ideal retirement? Wherever you are in your retirement journey, The Humphreys Group can help you ensure that you are well-prepared to head down the post-work path you want to take. Contact our team to start the conversation.