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As Usual, It’s All About Balance
What about semi-retirement, with deferred gratification not quite so deferred?
Financial columnist Humberto Cruz has long been a model for me of deferred gratification. I remember reading his stories twenty years ago, about how he and his wife gave up something in the here-and-now in order to have something in the seemingly far-off future.
But eventually, the future arrives. Even for Humberto Cruz, who must sooner or later face the fact that he’s done an outstanding job with his money. And that—-even though he’s still working—-it might not hurt to spend some of it now rather than wait until he’s too old to enjoy it.
Without enough money saved, you may have no choice but to postpone retirement. But that doesn’t mean postponing gratification, at least not all of it.
Cruz recently had a conversation with Christine Fahlund, a senior financial planner with T. Rowe Price in Baltimore. They discussed how many aging Boomers are being dealt the hard news that, because of the economy, they might not be able to retire as soon as they planned. And how the news affects them. Some, apparently, go into denial and retire anyway, insufficient funds notwithstanding.
There’s an alternative way to approach this dilemma, says Cruz:
Say you had your heart set on retiring next year, but a review of your finances shows you will need to keep working a few more years to build up your savings. At the same time, and making sure you stay within your budget, you could start to indulge in some of the “wants” you were putting off until retirement.
In other words, according to Fahlund, maybe it’s time to lighten up a little.
“If that is a cruise, take it now,” Fahlund said. “If you wanted to build a better workshop in the basement, start investing in the equipment you want. Do not delay gratification. Focus more on the cruise and the workshop” rather than on having to keep working.
Whatever you do, Cruz and Fahlund agree, don’t retire before the time is right. For every six months to a year that you remain in the workplace, you have that much less time to provide for during your non-working years. And if you can begin to really enjoy some parts of life you’ve been postponing, it might just make going to work much more palatable.
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Are You a Late Boomer?
If looming retirement is catching you off-guard between an aging parent and a revolving-door kid, you might be. If you've delayed travel only to discover they've changed the names of all the countries, you are. And if you're a member of the Baby Boomer Generation who's ready to give back but you've forgotten where you put it, stay tuned. From healthcare to personal finance, from career changes to volunteerism, it's time to boom where you are planted.