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What does retirement look like in the future? For many, the age they had in mind to retire at is being pushed further out. Those that are struggling to make ends meet now, may be considering coming out of retirement to counteract inflation.
No one knows how much money they will need in retirement. We could estimate if someone could tell us how long we will live and what we will die of. Slow declines that require long-term care can be very expensive. Some folks save up for such an event but die in their sleep before their 80th birthday.
No one talks about retiring and unretiring, yet people do it. I think it is safe to challenge the notion that retirement has to be forever.
There is tons of advice out there about how much money a person needs to retire and most of it comes from people who earn their living by helping people invest retirement funds.
In January of 2021, a friend called asking for help. He isn’t just a friend, he is a competitor and a neighbor. He told me that he was planning on retiring soon.
I asked him why in the world he would want to do that. He is a broker-owner of his own company, and he is the only person in his company. His overhead is low, and he has been in real estate for decades.
He told me that he is tired of working. He wanted to refer his clients to me. I reminded him that if he kept his license active, he could refer those clients to me or to others and collect referral fees. I also asked him why he was working if he did not want to. Why not take a few months off?
He decided not to retire and took some time off instead. He is happy with his decision. He works with sellers that he knows and refers the buyers to other agents. He does not want the responsibility of supervising agents of his own and has begun selling off investment properties.
We jokingly call it “semi-retirement.” He only works with the clients he wants to work with, and he isn’t working full time anymore.
He appears to be enjoying life more and working less. Even though he is working less, he is serving his clients well — and better than someone who is inexperienced, too busy, or too focused on building an empire.
Any agent preparing for retirement should be able to do the same thing unless monthly overhead costs are too high, the broker has minimum sales requirements or there are franchise fees. I have known agents who were still working in their 80s. I know many agents and brokers who are in their mid-70s and going strong.
I challenge the narrative that older, more experienced agents and brokers with established client bases are going to hurt the industry somehow by working with fewer clients for fewer sales or only representing home sellers.
Any plans I had for retirement changed during the Great Recession and housing market crash. My plans had a fatal flaw in that I hadn’t planned for that recession. During the recession, there was a drop in the number of Realtors and the average age went down by a few years indicating that older Realtors retired from real estate.
When it was all over, my priorities changed. Paying off the house became a priority. Being debt-free means more freedom and less responsibility. I also increased contributions to my HSA (health savings account) and to my retirement plan.
It is much easier to put money away after the children leave the nest. Expenses go way down. It is a great time to work and save.
A friend of mine retired last winter. She is a lawyer and is keeping her license active. She just decided that there really isn’t any point in working anymore. She cooks and gardens and raises chickens.
The pandemic woke her up. Her ideas about how she wants to spend her time have shifted. I can relate. How I spend my time is more important to me now and money is less important.
We are encouraged to plan for retirement starting with our first job. It hangs over our heads and causes worry rather than excitement. The idea of saving for retirement keeps people from enjoying life — and keeps them in jobs they hate.
I don’t think I ever worked for the fun of it and have been working full-time since I was a teenager. Sometimes I do have fun, but my idea of fun isn’t limited to working and making money. One of the reasons I started my own company after the age of 55 was so that I could have some flexibility and control over when and how I will retire.
There isn’t a one-size-fits-all kind of retirement. I have noticed when unemployment rates are high, retirement is encouraged. When the labor market is tight, working and delaying retirement are encouraged and we read articles about how retiring is bad for us and unhealthy too.
We don’t know how long we will live or how we will die which makes planning hard. It is better to have a wishlist, some goals and some short-range plans that can be changed. An exit plan is useful, too.
Teresa Boardman is a Realtor and broker/owner of Boardman Realty in St. Paul, Minnesota. She is also the founder of StPaulRealEstateBlog.com.
