Practical analysis for investment professionals
19 September 2017

Planning for a Non-Retirement

Much of financial planning focuses on retirement. But what if your client isn’t planning to retire?

Trish Wheaton, former global managing partner of one of the world’s largest communications groups, is grateful that she could work 30 years in advertising — an industry notorious for employing youthful “mad men.” She wasn’t surprised when she was told that her time was up at age 65, but she also wasn’t ready for a traditional retirement.

Wheaton mused:

“Sixty-five is the new 45. I had to ask myself ‘what’s next?’ I realized I didn’t have a clue. When I talked to my female peers in the same situation it turned out that they were feeling the same way. We were all used to being successful. People still want to invest in their passion . . . it’s just a question of where do they invest it now.”

She decided to form a Leaning Out™ salon: a gathering of high-achieving women who discuss finding post-career success and purpose. “With the same energy, goal orientation, and drive that propelled them to lofty career heights,” Wheaton explained, “these female professionals are radically redefining ‘post-career’ and turning it into a time of abundant purpose, goal redefinition, and personal well-being while over-turning some well-entrenched approaches to ‘retirement’ in the process.”

I participated in one Leaning Out session, where we discussed a host of topics, including what motivates women to non-retire.

Most successful women truly enjoy working. That message came through during our salon with comments like:

“I hate saying I’m retired.”

“After my job ended, I would go to my computer in the morning and when I looked at my email, I would feel like I don’t exist.”

“I miss the intellectual stimulation from work.”

“I want to do something different now . . . something that will matter to me.”

Opting out of retirement might even be good for longevity. Shigeaki Hinohara, a Japanese physician, worked 18 hours a day, seven days a week until his death at the age of 105. He spoke to Judith Kawaguchi of The Japan Times about the secret to living a long life:

“There is no need to ever retire, but if one must, it should be a lot later than 65. The current retirement age was set at 65 half a century ago when the average life-expectancy in Japan was 68 years. Today, people live longer so they can work longer.”

Five Non-Retirement Scenarios  

1. Boards of Directors

Many professional women assume that after they move on from their roles as senior executives, they will immediately be asked to sit on corporate boards. They have heard that women directors are in demand, and they expect to be invited to serve based solely on their experience and gender.

“Be careful. Don’t make the grand assumption that you will be in demand the day after you move out of the executive suite!” says Joanne De Laurentiis, a corporate board member and former president and CEO of The Investment Funds Institute of Canada (IFIC).

“Often people think that the simple fact that they have been an executive qualifies them to sit on a board. But the skill set required can be quite different from their work background. Board members must have a strong combination of skills such as strategic thinking, problem solving, and leadership, but perhaps most importantly . . . they need to have specific expertise related to the business dealings of the organization.”

If you are planning on sitting on a corporate board, you need to have developed the full spectrum of skills required and should be known for your expertise.

The best way to plan for life on boards?

As De Laurentiis explains:

“Start developing your board skill set in the early years of your career. I started volunteering on boards right out of university and I have been on boards throughout my entire working life. When the time came for me to leave my traditional job, I didn’t need to seek out any board positions, I was already well-known as an expert in my field.”

2. Self-Employment

Women are more likely to want to be independent workers. Why?

As Freelancers Union founder Sara Horowitz explained:

“This generation of women freelance workers represents transformative change. Reacting to economic pressures and the ill-fitting office culture around them, they’ve struck out on their own. They’re harnessing technology to focus on work that they find rewarding, on a schedule that fits their lives, and on terms that dignify them as vital contributors to our economy.”

Kathleen Traynor, managing director of Traynor Consulting, made the big decision to leave her executive director role at FIA Europe where she led its regulatory and advocacy initiatives.

Many women feel the need to have a hand in their own destiny,” she said. “There is a huge trend in the UK to start your own business: consulting in your area of expertise so that you can have more control over your time and energy. This also means managing your own approach to your financial well-being.”

Sometimes the rationale behind a decision to choose independent work isn’t so positive. There are many stories of middle-aged men who want to work but can’t. Women face the same issue. Nearly half of long-term unemployed people in the 55- to 64-year-old age bracket in the United States are women, according to the US Bureau of Labor Statistics.

Author Sally Koslow explained why she opted to work independently: “Many employers ignore this mature workforce, most likely because they don’t want to pay the salaries experience deserves. . . . Which is why I joined the gig economy. . . . My second act has gone well, perhaps because I report to a taskmaster: me.”

3. Entrepreneurship

The world of women entrepreneurs is expanding at a rapid pace. Thanks to social media, women business owners have greater visibility via peer-support networks, achievement awards, and a focus on role models.

The report “Growing Under the Radar: An Exploration of the Achievement of Million-Dollar Women-Owned Firms” is based on data from the US Census Bureau. It states that “over the past decade the growth in the number of women-owned firms with $10 million or more in revenues has increased by 56.6%, a rate 47% faster than the rate of growth of all $10m+ firms and nearly twice (+98%) the rate of growth of all women-owned firms.”

In “Why Women Over 50 Make Better Entrepreneurs,” Sharon Bush writes:

“Over-50s hold 80% of the developed world’s wealth, and as more of them make their way to retirement they’re ready to start spending. And with women making the majority of household purchasing decisions, who better to lead the way in developing new products for the over-50 market than female over-50 entrepreneurs themselves?”

Barclays reported a 67% increase in women over 55 opening business accounts in the last decade. For those aged 65 and older, the number is up 132%, the largest rise of any demographic.

4. Change of Career

At age 58, Financial Times columnist Lucy Kellaway decided to make a radical career shift from journalist to math teacher. She explained why: “Although I still love my work, I knew it was time to go once I realized I had stopped being frightened of writing useless columns. Fear is life’s biggest motivator and without it, you have to move on.”

She says her future will undoubtedly entail a steep drop in income and a great deal of uncertainty, but Kellaway is forging ahead and encouraging others to join her. She is a co-founder of the charity Now Teach, and the website provides a vivid description of how many feel about their decision to change careers:

“You’ve worked hard and made a success of your career — but your job doesn’t grip you the way it once did. You dream of starting all over again and doing something new. You want to feel useful. You’re ready for the hardest thing you’ve ever done.”

5. Multitasking for an Income

When I was about to turn 55, I took a stroll along one of my favorite streets. I’m not the only person who has heard a “voice in their head,” but my voice bellowed at me — “MAKE A CHANGE!”

Back at my office, I asked my boss to join me for coffee. We sat outside and talked about my potential transition plans. How could I keep the parts of my job that I loved and how could I let go of those parts that were weighing on me? How could I continue to get paid to work with my long-time clients and how could I also get paid to work on certain independent projects that were of huge interest to me? This type of conversation is uncommon in the hard-driving investment management industry.

As luck would have it, not only did my boss understand my situation, he also supported my decision in a subsequent meeting with our CEO.

Today, I multitask for income. I research, write, speak, and consult — and only on projects that I am passionate about.

Wouldn’t you rather not worry about someone else randomly deciding that you are past your prime? Having multiple revenue streams is a great way to diversify your employment portfolio.

How to Help Clients Plan Financially for Their “Second Acts”

First, avoid making stereotypical assumptions about retirement. Start with a blank slate.

A decision to non-retire is one that is based on personal values.

Ask your clients the following questions to better understand the context and thoughts behind their choice:

  • What do you value most about the idea of non-retirement?
  • What must happen for your non-retirement to be successful?
  • How will you define success from a financial perspective?

Cover all the basics: income requirements, expected rate of return, time horizon, liquidity needs, tax restrictions and liabilities, and unique preferences. The responses will serve as points of reference for your ongoing planning discussions and will help determine the client’s optimal portfolio asset mix.

Plan for the Worst-Case Scenario.

What if you do what you love and the money doesn’t follow?

Julie Bristow, president and CEO of Bristow Global Media, talked about this scenario:

“For years, I had a corporate position as a senior executive with the Canadian Broadcasting Corporation. When I decided to go into business for myself, I was fortunate enough to get a significant project as a start, but I suddenly needed to raise capital. And even though I had managed $25 million to $60 million portfolios while working at the CBC, no one wanted to give me money!”

Whether a client’s non-retirement plans are based on obtaining a certain number of board appointments or winning a certain number of freelance contracts, uncertainty is the name of the game.

What are your client’s alternate sources of funding? What is their Plan B? Relying on an expected inheritance is not a good answer!

Melek Pulatkonak, the founder of TurkishWIN — the Turkish Women’s International Network — offered some good planning advice:

“I tell other female entrepreneurs to assume that they won’t make any money for two years. You need to be comfortable with the idea that your savings will support your life during that timeframe. . . . The ups and downs can wear you down so it is critical to plan your finances carefully.”

Perfection Is the Enemy

The non-retirement conversation requires advisers to tap into their clients’ emotional lives.

My research has taught me that smart women have a tendency toward perfectionism. Even when fully engaged and passionate about making big life and career changes, women may feel that they don’t have it all planned perfectly. This can lead to indecision, and nothing great emerges from that state.

With perfectionist personality types, an adviser can help by acting as a cheerleader. Provided, of course, that the adviser feels that Plan B is reasonable.

As a recovering perfectionist myself, I deliberately didn’t put much formal planning into my transition other than encouraging myself to follow my favorite mantra: “You become what you think about.”

My ideal non-retirement is to live all parts of myself through a fully integrated work and personal life. I want to get paid to express my ideas and vision of making the world a better place for women.

For me and many other women, non-retirement is not only about helping our bank accounts, but also helping our minds, bodies, and spirits.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©Getty Images/Spark Studio

About the Author(s)
Barbara Stewart, CFA

Barbara Stewart is a chartered financial analyst (CFA) with 30 years of investment industry experience; five years as a foreign currency trader, more than two decades as a portfolio manager for high net worth entrepreneurs, and during the past six years, as an interview-driven researcher for multiple global financial institutions. She is a keynote speaker for CFA societies, banks, stock exchanges, and industry conferences globally, and she is a columnist for CFA Institute, Canadian Family Offices, and Canadian Money Saver. She is on the Advisory Board for Kensington Capital Partners and also is the Ambassador for the Kensington Women’s Forum. Fourteen years ago, Stewart saw a need to challenge outdated financial industry stereotypes and share positive messages about women and money. Today, she is recognized worldwide as one of the leading researchers in women and finance. Rich Thinking® global research papers quote smart women and men of all ages, professions, and countries, and are released annually on International Women’s Day, 8 March. To find out more about her research, visit Barbara Stewart.

5 thoughts on “Planning for a Non-Retirement”

  1. Hi Barbara
    What you are writing about is so important and. I am a danish writer myself and I spend a lot of time thinking about how to make my working life as meaningful as possible (for a whole generation of women). 3 1/2 years ago I didn’t know anything about investment ( I work with lifestyle in my professionel life) but started blogging about investment & women. After a while I was asked to blog at Nordnet DK – and they mentioned you. So I could see that my interviews with women ( its was more “ordinary” women) show the same result as yours. I am not surprised ! This article is just another angle about how women should have the courage to change from what they have been doing for year because the still have a lot of energy – And it is a waste of talent and ressources not to use this “force” –
    I hope you will continue the good work – I will do my best from my location – I promise 🙂 The best – Helle Christiansen

    1. Dear Helle, Thank you for your comments. The world is a small (but great) place! I work in Copenhagen part of my time these days so please send me an email to: [email protected] and we can meet in person. Thanks again.

  2. Diana says:

    Continuing to work past retirement age can give you more flexibility about when to start claiming your social security benefits. Seniors who wait to receive social security after 66 years of age receive 100 percent of PIA (primary insurance amount). By waiting until age 70, they’ll receive 132 percent of the PIA. There is no point in waiting beyond age 70 because that’s when credits stop accruing. Note that it is important to keep an eye on the taxation of social security in your non retirement years.

  3. Tony Somoza says:

    I’ve left the corporate side of investment management for a relatively small RIA where I work now and consider myself semi-retired . A couple of retirement issues have come up that may by helpful for those considering slowing down or say working part-time.

    There is no RMD for your 401k you have at your place of employment. A good strategy to manage your taxes is to transfer any other 401k to your working place 401k. You can then take a distribution at anytime or not.

    If you are making 529 Plan contributions for grandchildren, make them while you’re fully employed, because after, you most likely will not be in a position to continue to make those contributions.

  4. I cannot relate at all. It sounds like urban angst from people who have a choice. I have worked as a non-profit arts executive for 35+ years, and cannot imagine retiring, as much as I really really want to, because I cannot afford to. And when I finally can retire well past 70, the last thing I ever want to do is serve on another bloody board of directors. I love my job, I do good and important work at the intersection of music and health, and I am blessed with excellent people. But I have TONS of other things to do with my life that do not involve work. I like my own company, I want to draw, garden, sleep – oh YES Sleep! And if the world allows it, a bit of travel if I can afford it. I do not need to prove or validate myself with any other kind of work. I want to relax and watch life instead of always driving the concept/project/program, and managing everything around me. I wish you all well.

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