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Is Traditional ‘Full-Stop Retirement’ Going Extinct?

Today’s blog is a guest post from my colleague and Huber Financial’s President, Rob Morrison. A few weeks ago, Rob – along with his co-authors Mike Drak and Jonathan Chevreau – celebrated the release of their new book Victory Lap Retirement: Work While You Play, Play While You Work. Along with the book, Rob launched a companion blog where he will write regularly on this increasingly popular approach to retirement planning.

Is Traditional ‘Full-Stop Retirement’ Going Extinct?

My answer: For a growing number of clients, yes.

Why do I think this? As a financial advisor helping clients plan for their retirement, I’ve run through the exercise thousands of times over the last two decades. In that time, I’ve seen a wonderful divergence in the way people are approaching the end of their careers and beginning of the next chapter. I’m fascinated, in particular, with folks who take a glidepath approach to retirement – slowly winding down their work from peak-career levels of 50-60 hour work weeks to a more balanced work/life mix. It goes by many names, but I call it a Victory Lap Retirement. Imagine, 25-30 years spent head down, sprinting in a profession or industry to reach the peak – followed by a chapter of circling the track at a relaxed jog, working on your own terms for 5, 10 or even 20 years.

I have become an ardent advocate of this emerging trend with clients and friends not simply because I think it’s a more fulfilling approach to enjoying the front end of retirement. Its actually better financially for many of the people we serve! Think about it this way, with the massive shift away from corporate pensions over the last several decades, would-be retirees are increasingly dependent on their portfolio to fund their retirement. With expected returns of most asset classes declining, there is increased pressure on all other aspects of the average retiree’s plan. Introducing additional earned income to a retirement scenario has positive impact on a number of variables. In particular, delaying or reducing portfolio distributions can take the pressure off of a retiree and their investment managers.

Other Fringe Benefits to a Victory Lap

Beyond the direct financial benefits, there are loads of other reasons we see more people transitioning more gradually into retirement. The social, intellectual and psychological benefits of doing work you enjoy are enough to entice more of our clients to work – often indefinitely. The reality is we get so many benefits from working that go beyond a paycheck. The sense of accomplishment, the personal relationships and camaraderie and company perks are just a few of the additional benefits of continuing to work on your own terms.

I was fortunate to observe my own father’s transition from corporate America. Having spent his entire career in the airline business, my Dad transitioned into consulting work when he was in his 50s. He maintained a handful of clients while achieving much more work-life balance for the better part of the next 25 years, only recently retiring in his late 70s. He loved the connections he made and was generously compensated for his expertise and counsel.

Full-Stop Retirement in a Modern World

So why don’t more people embark on Victory Laps? It’s largely because our society is still anchored largely to the “full-stop retirement” concept from the manufacturing era. Moving workers into retirement today bears little resemblance to the factories of old. These institutions needed able bodied younger workers to replace older workers who couldn’t physically produce at the same pace after decades of wearing their bodies down.

Today’s information economy employs mostly intellectual laborers, who are willing and able to perform longer. The other reason more people don’t take the glidepath approach is simple: they don’t know how. It seems easier to stick with the habits that brought you to the peak of your career for as long as possible.

Evolving Beyond a Retirement “Number”

Financial planning and wealth management is still a fledgling field that must continue to evolve as the needs and wants of our clients change over time. In the area of Victory Laps, I think there’s plenty of room for us to lead clients to more balanced, fulfilled and flexible lives.

Financial professionals continue to orient clients to solve for their retirement “number.” While this is a step forward in helping clients conceive and fund retirement, we can and should do much more to help them conceptualize and plan alternative ways to transition.

About the author

Phil Huber, CFA, CFP®

Phil is the Head of Portfolio Solutions for Cliffwater, a leading alternative investment adviser and fund manager. Prior to joining Cliffwater in 2024, Phil was the Chief Investment Officer for Savant Wealth Management, a multi-billion dollar wealth management firm. Phil has been involved in the financial services industry since 2007. He earned a bachelor’s degree in finance from the Kelley School of Business at Indiana University. He is a member of the CFA Society of Chicago. More about me here. Twitter: @bpsandpieces

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