How to Plan for Retirement if You Don't Plan to Retire

Nov 17, 2017 / Amanda Chase, Horsesmouth Editorial Assistant

Some people are counting the days until retirement, and there is nothing wrong with that. Others have decided to keep working out of financial necessity, and this seems to be a prudent decision.

And still others, however, have assessed the situation and deemed that although they have achieved financial security for retirement they are happy with their current condition and feel like they want to keep working until Father Time tells them differently. Their reasoning is simple: why should I look for another way to enjoy a fulfilled and meaningful life when I already have one? It’s a growing population that seeks to continue to work. In the second quarter of 2017 19% of those 70-74 were still in the workforce (up from 11% in 1994).

Suddenly financial planning takes on a different meaning. The same rules do not seem to apply since, well, retirement will start when frailty sets in and it will probably last only a short time. You need to consider how this changes if your client continues working. But be aware: According to the Employee Benefits Research Institute, between 40% and 50% of people retire earlier than they expected.

If your clients are considering an indefinite working life, consider the following:

  • They may be able to avoid required minimum distributions
  • They may be able to take some retirement distributions while working
  • They may be able to keep making Roth IRA contributions
  • They may be able to make retirement contributions or receive retirement contributions made on their behalf
  • They may be able take Social Security without losing benefits
  • They may want to ignore the 4% withdrawal strategy
  • If they are eligible for nonqualified benefits from an employer’s supplemental executive retirement plan (SERP) or so-called top-hat plan, the extension of a career may also mean the delay of collecting these benefits.

To read the full MarketWatch article, click here.

 

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