Sometimes when it comes to retirement plans, we tend to think of retirement in terms of well, just retirement. We know it's something we hope to have, something we need to have the funds to secure, and that it's a time in which we will hopefully be able to relax a bit and enjoy. However, what we often fail to consider is that retirement now might not be what our parents' or grandparents' retirements were. Retirement might now be a sort of hybrid version of their retirement and a kind of newer, fresher retirement.
To some, it might seem like there is just one type of retirement…retirement. But I've been doing some thinking about different types of retirement lately, and I recently came across a good article on the subject at ConsumerismCommentary.com. The article broke retirement down into four types:
- · Working retirement
- · Reliant retirement
- · Draw-down retirement
- · Independent retirement
Deciding what sort of retirement we'd want and what's possible
As much as we'd like an independent retirement in which we could rely solely upon interest and dividends from our investments, I'm not sure if this is realistic. And as much as we would love to be close to our children in retirement, I don't want to become reliant upon them for our care.
Personally, I enjoy my work and would like to consider working at least part time in retirement, but don't want to be solely dependant upon a working retirement income. And drawing down against our retirement could be an option, but it opens us up to decreasing the effectiveness of our retirement account returns by lowering the principal available to provide those returns.
Picking and choosing
After considering the options, I think we're more of the mindset that we'd like to create a sort of hybrid retirement. There are hybrid vehicles now, so why not a hybrid retirement?
Our current plan is comprised of several retirement types. First off, I will continue to work as a writer part time, earning a small, yet useful income to supplement other retirement income sources. We will utilize income streams like Social Security and/or a pension as well as any interest or dividend income as the next step in our retirement plan. Should this not be enough, we could do a partial draw-down of certain retirement assets spread among cash, certificates of deposit, bonds, and retirement accounts so as not to diminish any one area too significantly. And as the final part of our hybrid plan, we hope to live close enough to our children for us to be of assistance to them and also for them to assist us if necessary, but hopefully so that neither side is reliant upon the other completely.
In this way, we hope that we build a hybrid retirement plan that is well-diversified, flexible, and gives us options and opportunities when it comes to how and where we live out our golden years.
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