But I Don't Want to Retire!
Why You Should Save for Retirement Even If You Don't Plan to Retire
I occasionally hear people protest the idea that they should be saving for retirement. They love their job and find themselves not wanting to retire because they enjoy working. They like the notion of maintaining an active lifestyle and furthering their careers, even into their 70s, like so many CEOs and politicians often do.
While it’s fantastic that some people enjoy working so much, the fact that they don't want to retire is irrelevant to the discussion about saving for retirement. Here’s why.
You May Be Forced to Retire
Retirement doesn’t always happen by choice. Sometimes people are forced into retirement for reasons beyond their control, such as:
- Industry decline
- Age discrimination
- Health issues
- Family care
A slumping economy can force employers to lay off even the best workers. Many employers don’t want to let go of great workers, but declining revenue forces them to make that tough call.
Technological change can also lead to employee layoffs because it makes some industries and careers obsolete. Many people in the newspaper industry, for example, felt the pinch after the popularization of the Internet. When classified ads transitioned from print publications to Craigslist and other websites, newspaper revenue dried up and took plenty of jobs along with it.
Many older workers have complained about job discrimination as a result of their age. Age can make finding a new job challenging, especially if discrimination is combined with industry decline or a recession. Some discriminatory employers unfairly view workers who are advanced in age as unable to adapt to changing technology when compared to others in their 20s and 30s.
Some retirees would love to work, if only their health allowed them to do so. Unfortunately, with age comes the increased risk of deteriorating health, which can impact the ability to work.
The health of others can also force you into retirement if a partner, sibling, parent, or child requires long-term care. Retiring from work makes financial sense so you can care for your family yourself because at-home nursing care could cost more than your annual salary. Unfortunately, this option will only be available to you if you’ve planned for your own retirement.
You Can Confidently Take Risks
Let’s assume the best-case scenario, and you're not forced into early retirement when you’re in your 60s. The economy is strong, your industry is growing, and you’re recognized for your job skills and talent. Your health has never been better, and your family’s health is also in fantastic condition.
At this point in your life, you might be hungry to take some career risks. Perhaps you want to start a business, run for office, write a book, or otherwise take your career in a different direction. Or you may be thinking about cutting back on your working hours so you can spend more time with your grandchildren.
Whichever direction you see yourself heading in, a healthy retirement fund will help you have the financial freedom to take those risks.
Redefine Retirement If You Don't Want to Retire
If you do not want to retire, you may say that retirement is a misnomer. After all, a retirement account is simply a tax-advantaged saving and investment fund that you can’t tap until you’re older.
If that sounds like you, redefine what retirement means to you. Instead of thinking of retirement as the end of your career, think of it as an account that lets you legally avoid or defer taxes on your investments in exchange for your promise that you won’t spend the money until you turn 60.
You can begin to make penalty-free withdrawals from a traditional IRA when you turn 59.5 years of age.
The money you save for retirement doesn't have to be used in place of a regular salary. Plenty of older people have launched successful enterprises with the money they saved. Harland Sanders, the founder of KFC, was 65 when he began franchising his business. Ray Kroc, the founder of McDonald's, was 52 when he teamed up with the McDonald brothers, his business partners.
Saving for retirement is important even if you don't want to retire. Having money allows you the financial freedom to take career risks you otherwise wouldn’t be able to take. When you’re in your 60s, with 40 years of experience and connections already built, you might want to capitalize on opportunities. A strong retirement fund will allow you to do that.