Bending The Curve: Coronavirus And Your Retirement

3 benefits of the retirement remix during challenging economic times

Over the past couple of weeks, one phrase that I’ve heard a lot from government officials and medical experts when discussing Coronavirus is, “we want to bend the curve.” It’s not a new term, particularly for people who are familiar with government efforts to reform programs like social security. In many cases, “bending the curve” refers to slowing down the rapid occurrence of something – when it comes to the Coronavirus, it’s the rapid growth in new cases. In the case of retirement programs, bending the curve means decreasing the number of new people who are enrolling or participating at any one time. 
 

Professionals in the pension arena have been working on bending the curve in their retirement programs for a long time. You may have noticed those companies that still have pension plans (and the federal government) have been shifting the age for full retirement. The age that you can receive benefits has gotten older over time, in part, to bend the curve. The reason for that is the people who are responsible for these funds want to make sure that they last! 

Many people don’t think about their own retirement in the same way. Don’t get me wrong, people want their money to last, but when it comes to planning for retirement on a personal level there is no “full retirement age.” Folks often make their decision on when to retire based on two arbitrary factors: 1) when their parents retired or 2) when their friends have or are planning to retire. They default to what they’ve seen. It’s not uncommon for me to ask a client why they’ve decided to retire at age 62, for example, and to receive the answer, “All of my friends have started to retire, and I figured I should look into it too.” Rather than feeling like we have to do something, let’s look instead at what we could do.

Several years ago, I researched the happiest and healthiest countries in the world. What I found was shocking, mainly because it should have been obvious to me. In the four countries that made both the happiest and healthiest lists, workers take off an additional 220 hours per year more than the average American worker. In exchange, they work on average, about 2 ½ years longer. As I thought through my meetings with clients, I realized that most of them wanted a more gradual, intentional approach to their later working years. There just wasn’t a term for that approach.

Retirement – or what I refer to as “Old School Retirement” – is broken! Most of the people that I talk to; don’t necessarily want to “not work,” they just don’t want to continue working where or in the way that they have been. The truth is there is no right way to do retirement. It’s not a one-size-fits-all solution. It’s time for a new view of retirement that takes the parts of “Old School Retirement” that we like and changes them a little to make them more modern. I call this approach, The Retirement Remix.

The Retirement Remix, in many ways, functions a lot like “bending the curve.” Rather than viewing your later working years with apprehension, as if at some point you have to stop working altogether, view them with anticipation, knowing that you will have the opportunity to transition how and where you work over time. Instead of working full-time from your office, perhaps you could eventually transition to working part-time or you could even work remotely and continue to receive a portion of your income. Equally important, your employer (and the world, for that matter) could retain access to your wisdom – which is, in my opinion, far more valuable to them than your time. 

1. Maintaining some sort of income coming in can relieve the stress of inevitable market fluctuations. Having all or part of your income covered, makes you less susceptible to short-term conditions and allows you to take a long-term view.

2. Continuing to work (whether for pay or as a volunteer) allows you to stay more physically active. Staying physically active, rather than developing a sedentary lifestyle, is important for your physical health. 

3. Staying involved and engaged in a community is important to your mental health. I’m sure I don’t have to stress the value of social engagement to anyone who has had to spend time quarantined or sheltering in place.

The idea of taking a different approach to viewing retirement isn’t just about money. It’s about making the most of your life now. For example, if you enjoy your work, like John Stoll discusses in his article, The End of Retirement in the Wall Street Journal, why would you be in a hurry for it to end? The key is to be intentional about your choices and to ask for what you need. I’ve seen many employers, particularly in times where the potential for layoffs exist, who are very open to creative ways to keep talented people. This is one of those times!

What most people want, and what they think they’ll achieve when they finally choose to fully retire, is freedom – freedom from stress, freedom from worry, freedom from restrictions on their time. With proper planning and an open mind, you can work toward those goals today – there’s no need to wait. Now, more than ever, you have the ability to refine retirement – or remix it, if you will.

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Chip Munn and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.  Chip Munn, Senior Wealth Advisor, RJFS Office: 135 South Dargan St., Ste. 200, Florence, SC 29506 Phone:843-519-1100

Chip Munn is a former sixth grade teacher turned CEO of a thriving financial company. After 20 years in financial services, he felt confident that the idea of “old school” retirement was broken and eventually developed a method to apply better practices to help himself (and his clients) live happier, healthier lives. Chip found that his clients wanted more out of life now, not just in retirement. In his book and on his podcast, The Retirement Remix, he shares his insights on the changing landscape of retirement in America. Visit www.theretirementremix.com Follow @chip_munn