Keep your options open as retirement approaches

It used to be, you’d work hard your whole life, then retire with a gold watch and a few good years left to visit the Grand Canyon, spoil your grandchildren and get hooked on daytime TV. Pension plans were the rule not the exception, Social Security was healthy and employers encouraged early retirement to make room for younger workers.

Things are much different today. The average lifespan is seven years longer than in 1960, but corresponding medical breakthroughs have led to astronomical health care cost increases that crimp many retirees’ lifestyles. And, as 77 million baby boomers rapidly approach retirement with only 44 million GenXers to take their place, employers may face severe personnel shortages.

According to an American Association of Retired Persons (AARP) study, nearly 80 percent of baby boomers expect to work at least part time after they retire, for a variety of reasons, including: 1) Those who can’t afford or qualify for individual medical insurance will need to continue working until Medicare kicks in; 2) Many people haven’t saved enough for retirement and keep working to stretch their savings and receive benefits; 3) Even when money isn’t a concern, many people continue working because they’d miss the social interaction, mental challenge and physical activity a job provides; and 4) Some people keep working in order to give back to their community through volunteering, mentoring younger workers or working at a non-profit organization whose mission aligns with their values.

Working after retirement age doesn’t necessarily mean the same old thing, year-in and year-out. Many people switch fields, explore new interests or cut back on hours and responsibilities while still drawing an income. Here are a few ways to plan ahead:

Find senior-friendly employers. More companies are recognizing the strong work ethic, skills and stability older workers can provide. AARP publishes “Best Employers for Workers Over 50” at www.aarp.org/bestemployers. They suggest looking for companies that offer benefits to part-time workers, long-term care and disability insurance, flexible work hours, financial planning services, and alternative work arrangements like telecommuting, job sharing or phased retirement.

Talk to your current employer. If you seek greater flexibility or less responsibility, talk to your current employer first. Given the expected shortage of experienced workers, they might be accommodating, especially if you’d otherwise leave carrying institutional knowledge you could share with less-experienced coworkers.

Boost your skills. Whether contemplating a career change or simply protecting yourself from downsizing or layoffs, recognize that you may need to update your business, computer and interviewing skills. Check your local community college for low-cost courses. Also, many Web sites offer tips on job hunting, resume building and career transition, including www.monster.com, www.hotjobs.com, www.careerbuilder.com and AARP’s site.

Go independent. Many people with specialized skills find they can make a good living – and lead a more flexible lifestyle – as a consultant. Independent contractors receive many favorable tax advantages; however, if you plan to retire and then consult for your former employer, first check with your Human Resources department for any restrictions that may apply.No matter what your retirement goals are, the sooner you start planning, the better. Practical Money Skills for Life, a free personal financial management site sponsored by Visa Inc. (www.practicalmoneyskills.com/retirement) offers a comprehensive guide to retirement planning.

Remember, the more options you have, the more likely you are to enjoy the next chapter of your life.