I don’t want to scare any Boomers –actually I do but for their own good — but you need to read Joe Nocera’s article My Faith Based Retirement today. The author, 60, describes why he will be working until he drops — literally. His 401K has been through the tech crash of 2000, a divorce, and a house renovation and there’s not much left. Since he’s a writer he doesn’t have to worry about physical problems other than Alzheimer’s.
Here’s why his essay is so important. He calls his retirement “faith-based.” Since only 20 percent of Boomers age 60 can retire comfortably at age 66+ he has more company than he’d like.
I think he’s luckier than most Boomers because he does what he loves for a living. How about the Boomer, in a similar financial situation, who hates what he does? He’s facing all eternity doing what he doesn’t like — and may not excel at — with no hope of escape. If that’s not Hell, what is? Here’s my plan for people who know they can’t do what they do forever but they will be forced to work for money for the next 30+ years.
1. Get the best financial advice you can afford from someone who sells advice only — no products. The key question: In order to live reasonably how much money do you have to save before you can retire? Post retirement how much money do you have to earn? You’ll make different career decisions if you know you need $30,000 in lifestyle money after retirement versus needing $80,000 for basic living costs.
2. Think about choosing a career as if you were just leaving school. What have you always wanted to do but didn’t? In the next 35 years you’re going to be clinically depressed if you work at something you can barely tolerate. I promise every minute spent researching a new career will be well compensated. You might find something you can make a lateral move to now knowing you can do it indefinitely.
3. What kind of business, part-time for now, could you start that would generate the money you need? You don’t have to do this today if you’re 55 but you will need to road test your ideas before you’re 70.
4. Could you partner with someone in a service business? No one needs to go it alone. Look around your workplace. Who else is beginning to see the future starkly?
5. If you tell yourself that you’ll save more, you don’t get the career choice issue. There’s a whole diet industry built on helping people who believe they can lose weight on their own, until they can’t. Don’t be a serial self deluder. Once you accept the need for a next career you will move forward.
If you have children or younger friends ask them what businesses they’d like to start. Thirty percent of all new millionnaires each year are under 35. It may be time to listen to the wisdom of the young as you consider new ways. If you are 55 you have time. If you’re 60 it’s time to pick up the pace.
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