Rethinking Retirement

May 2022

Rethinking Retirement

Some of the "conventional financial wisdom" circulating about retirement may need a second look because those assumptions may not prove true for everyone. Or, to put it another way, sometimes people think about retirement conveniently rather than realistically. Many people assume they will retire as they choose, purely on their terms. Is that how it usually happens? The Employee Benefit Research Institute’s 2021 Retirement Confidence Survey indicates otherwise. The average retirement age is 62, yet most workers expect to retire at 65. While 59% of workers believe they can ease into retirement via part-time work, just 19% of current retirees have. As for working in retirement, 72% of pre-retirees expect to do so, yet just 30% of retired survey respondents said they earned income from employment or freelancing. You still hear about the "4% rule" for retirement income withdrawals, withdrawing 4% a year off your retirement assets. But one size rarely fits all. One of the most complicated and essential calculations is figuring out how much money you can withdraw from your retirement account.  Finally, you sometimes read articles that tell you to save at least $1 million before you retire. It's important to remember that anything you have saved in your retirement account is better than nothing, but the more you can put away now, the more you may have later on.¹