I think I qualify as a near-retiree.
Frankly, I could afford to stop working now, if we were willing to give up our dream home and move back to our previous house (that we still own and are leasing out). But unless forced into it, why would we?
So, what are my near-retiree plans?
Solid Tips for Near-Retirees
Not wanting to limit this to my own ideas, I asked three other top finance writers on Medium for their best tips for people in their 60s and 70s, who are hopefully about to retire (or already retired if they were savvy and a bit lucky). Here’s what we came up with between the four of us.
I’ll start with my own contribution, based on how I plan to do things.
If you’re still working and want to retire soon, try transitioning into it by reducing your work from full-time to half-time for a few years, then down to 25% for a few more years. Then, keep it at that level or stop altogether, as you prefer.
This offers three major benefits:
- It lets you start the transition to less work and more play sooner than if you hold out for going from full-time to fully retired at once.
- It reduces your portfolio sequence-of-returns risk, where having a market crash early in your retirement forces you to eat into your portfolio’s capital, greatly increasing your risk of running out of money.
- It lets you gradually figure out what you want to do during retirement, so you don’t suddenly realize you’re totally bored and just waiting to die.
My second tip is to find something you enjoy doing, that you can do for a long time, and that brings in at least some money. This will keep you active, and reduce the size portfolio you need, and/or increase how much you can spend in retirement, and/or let you leave a larger bequest to your kids or a favorite charity.
Jason Clenenden’s advice is, “Hopefully you’re in good shape by now and ready to enjoy the fruits of your labor. Focus on investments that generate income so you don’t have to sell assets to survive. If you aren’t in good financial shape, you may have to continue working in some form or fashion to support your investment income until it can support you.”
Ben Le Fort says, “Assuming you’re financially independent at this point, focus on the things and people that make you happy. You’ve already done the work, now enjoy yourself. The obvious caveat would be to complete your estate planning.”
Wrapping up, Charlie Brown reinforces my first tip, sharing from the experience of family members, “Going from full-time employment to retirement (if you’ve not gone down a financial freedom route earlier in life) sucks. I’ve seen it happen with members of my family and it isn’t pretty.”
She continues, “Retirement doesn’t have to mean bridge club every Tuesday and golf every Friday with nothing to fill the gaps in between. You can still engage in meaningful work and get a lot out of it, whatever age you are.”
The Bottom Line
Without any coordination, all of us suggest in one form or another that near-retirees consider finding something they enjoy doing to continue doing even after “retiring.” This will help you feel productive and engaged, rather than simply passing the days and years until you die.
We all encourage you to fill your “golden years,” with whatever you enjoy doing, spending time with family and friends.
If your situation requires it, keep working at least while you can in order to “support your investment income until it can support you,” in Jason’s words.