Why We Need to Redefine Retirement

A traditional retirement won’t be possible or desirable for the baby boomers.

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Retirement as we know it has only been in effect for about 50 years. In the 1960s, the baby boomers started working and eventually pushed out the older workforce. Retirement communities came into being and new retirees took their pension and enjoyed their golden years. Before this, everyone but the wealthy worked until they could no longer do so.

[See The 10 Best Places to Retire in 2012.]

Many retirees in the 1960s had a pension, shorter time in retirement, and a lower cost of living due to fewer cool gadgets to buy. That definition of retirement is rapidly changing for future retirees. Most of the current workforce does not have a traditional pension. A retirement can last 25 or more years. It is quite difficult to stretch out retirement savings over such a long period. We also do not have the luxury of another boomer generation to support the current crop of retirees. The Social Security payout will decrease in the future unless changes are made to the program. And the next generation of retirees is likely to have an even more difficult time financially.

In this environment, it might be the time to redefine retirement again. If we look back to the period before the 60s, a much higher percentage of older folks continued to work and contribute to their family's finances. Older workers continued to work at a reduced capacity in their businesses or assisting family members. It is difficult to do this in a corporate setting, so we need to look at other alternatives for corporate workers.

[See The 10 Best Places to Reinvent Your Life in Retirement.]

Working part time in retirement could be the solution. A 65-year-old retiree has accumulated a lifetime of experience and skills, all of which are very valuable. An entrepreneurial senior can find good use for those skills and continue to work part time on the things that he or she likes to do. It's probably not a lot of fun to stock shelves at Wal-Mart, but maybe Home Depot is a good choice for someone handy with home improvement who likes helping people. Other retirees can expand on a hobby and try to make money with photography, tutoring, teaching beginners to play a musical instrument, or as a life or career coach. Being a freelancer allows you to earn money in retirement and maintain a flexible schedule.

[See Why Baby Boomers Will Have a Great Retirement.]

Many retirees have problems adjusting to having a lot of free time instead of going to work for a regularly scheduled eight hours per day. If they can continue to work part time, it will keep them busy and help them to remain a contributing part of society. A part time job gives you a reason to get up in the morning and there will still be plenty of time to pursue leisure activities.

Joe Udo is planning an exit strategy from his corporate job by reducing expenses and increasing passive income. He blogs about his journey to early retirement at Retire by 40.