The Next Adventure

When should you retire? For some people, the answer is simple: Get out the day you're eligible. Others stay long beyond their eligibility because they like their work and the routine they have established. Many folks I talk to want to be sure the kids are out of the house and the mortgage is paid before they set a retirement date. In some cases, retirement is determined based on the needs of an aging parent or a disabled spouse who needs someone to care for them.

Every year I write about "magic" retirement dates and lots of other people have written about how to plan for a financially secure retirement. But planning for retirement is an intensely personal process that is based, among other things, on your sense of adventure, motivation to start something new, and ability to accept change-not just on whether you have enough money.

When I was on the AARP retirement planning website the other day, I came across the fact that Ray Kroc, the founder of McDonald's, didn't get started in that business until he was 52. He had spent most of his career as a salesman. But he was starting to develop health problems, had an idea to start something new and the rest is history. Throughout the 25 years I've been working with people preparing for retirement, I've heard many inspirational stories about their plans for the next stage of life.

In my work at the National Institute of Transition Planning, I work with many people who teach about the retirement transition. You can find their advice in the In the Know section of the NITP website in articles ranging from "Working in Retirement" to "The Mind-Body Connection: An Important Element of Retirement Health and Longevity."

Different Routes

In many of my classes, I meet people who have spent their entire careers in federal service. Many of them will have built up enough replacement income that they won't need to work after retirement. These are the traditional planners, who will enjoy their golden years doing what they want-playing golf, fishing, traveling, gardening and spending time with the family. There's nothing wrong with that!

Other people only work until they are eligible to retire, and then pursue a second career. Many of them invest their federal retirement benefit and live off their new salary. The first key to this plan is investing your benefit conservatively, so you can use the money to pay off your debts in five to 10 years. The second key is to find a second career that you like as much and maybe more than the first. That requires thinking about more than just the work you'll be doing. For example, some employees aren't keen on taking a job with only two weeks paid vacation if they've been earning more than five weeks of annual leave in their federal career. Some people decide to go the self-employment route. Having federal health insurance included with your retirement helps to make this dream possible.

Then there are those people who look at retirement as a whole new beginning. Their dreams involve:

• Heading back to college to reinvent themselves for a different kind of work.
• Pursuing a love of music, art or literature.
• Turning a hobby into a full-time pursuit. Lots of federal employees have become woodworkers, seamstresses, cooks and paper crafters. Many hit the craft show circuit to sell their wares.
• Having fun. I have one friend in a high-stress federal job that involves dealing with millions of dollars in contracts. She wants to do something enjoyable and stress-free after she retires. How about working in a flower shop? Or a bakery?
• Moving to a new state or a different country. Remember, your federal health insurance can be used around the world, and you can receive your retirement check anywhere you choose to live.

Not Ready Yet?

Are you still a ways from retirement? Here's some advice: Learn to live within your salary and don't wait until tomorrow to begin saving for retirement. Since the current government pension benefit is not as generous as the old one, you'll need more in the way of personal savings. You can't count on Social Security providing much help.

How much should you be saving? Probably more than you are right now. When you get your next pay increase, try to boost your savings by at least a third of the amount of the raise.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Monday mornings at 10 a.m. ET on federalnewsradio.com or on WFED AM 1500 in the Washington metro area.