Recently, I had a conversation with a friend about his retirement plans. At 60 years old, he’d put in a lot of effort and made sound investments, but he was feeling burnt out.
He previously sought advice regarding his investment portfolio, and while the numbers mattered, I think we both realized it was more nuanced than just that. There was also a matter of lifestyle choices.
Should he continue to work in some capacity?
It wasn’t his initial preference, but finding a way to earn some income could ease his concerns about whether his portfolio would hold up. Even a part-time job with lower pay would mean fewer withdrawals from his portfolio, allowing him a more stress-free retirement later on.
Additionally, continuing to work could allow him to push back his Social Security benefits. If he had a job with health coverage, it would save him from paying for insurance himself, plus he would also be eligible for Medicare soon. Though his job has worn him out, it’s been a significant part of his identity and he seems quite attached to his career.
Ultimately, my friend opted for a reduced schedule. By working 30 hours a week, he could still keep his healthcare benefits.
For others, taking a complete break might be the best choice, particularly if staying in the job affects their mental or physical health.
What kinds of lifestyle changes are you considering?
We also touched on whether he had made any changes in his spending. He owns a condo in a costly area, and he thought about moving back to the Midwest after retiring. While that could help him save more for his portfolio, it would also mean leaving behind his social circles and the core of his professional life.
Right now, that seems to be the best decision for him, especially since I’m still working.
How adaptable are you with your spending?
This aspect is crucial. If retirees can manage their spending during market downturns, it might help their portfolios recover better after losses.
Research suggests that flexible spending approaches can lead to higher overall spending during retirement compared to rigid strategies that maintain a fixed withdrawal rate.
My friend is open to adjusting his expenses to suit his needs. He isn’t a big spender, and because of frequent work trips, he’s not particularly interested in indulging in lavish experiences like many new retirees might.
