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Pretirement: A New Stage of Life

Philip Moeller

For a complex set of factors--economic, demographic, health, and personal values--millions of older Americans are extending their working lives well into their 60s and even 70s. Often, the extension of jobs and careers is viewed as a necessary but negative accommodation to the Great Recession, depleted home and investment values, and the failure to set aside enough money to last for lifetimes that typically now stretch well past 80 and often closer to 90.

There's even been a new word coined for this evolving stage of life: pretirement.

Pretirement is hardly in wide circulation, and has varied meanings. Journalist Walter Updegrave used it this past summer in a CNN/Money piece as shorthand for "practice retirement." Two younger working moms and entrepreneurs, Shannon Ward and Diana Stirling, launched pretirementliving.com to become cheerleaders for a different kind of business model that allows them to better balance family and work responsibilities. They even have a pretirement Facebook page.

But pretirement also describes a broader set of later-life decisions. Keith Weber, a financial planner in Colorado, is trying to develop the concept of pretirement as a new model for financial planning.

His definition, which we'll use here, is:

Pretirement describes a new phase of life that fits between career and retirement. Traditionally, our lives have been divided into three stages: education, career, and retirement. But with longer life expectancies, generally better health and the economic need to continue to earn an income, the line between career and retirement is blurring. Emerging from that blur is an entirely new life stage called pretirement.

There are, to be sure, a lot of negative aspects about delaying retirement. Physically taxing work can be especially hard on older folks, for one. Having to keep working can be very tough for those who were looking forward to a life of leisure in their later years. And if there's not enough money to afford retirement, the stresses of living at or near the financial edge can be very difficult.

But the guess here, and it is only a guess, is that the blooming of the "encore careers" movement and strong entrepreneurial activity among seniors are unstoppable trends. They would have occurred in the absence of a recession. And they would have happened even without the growing recognition that traditional pensions had given way to employee retirement accounts that were insufficiently funded to support traditional retirements.

People getting ready to turn 60 increasingly realize they are facing perhaps 30 more years of life due to longevity gains. Many, if not most, have careers as knowledge workers in a service industry. Continuing such work is not physically taxing. As U.S. News documents in its new book, How to Live to 100, the values of work extend far beyond a paycheck. A satisfying job generates happiness and enhances well-being and even physical health and longevity.

No one is surprised that Warren Buffett continues working at the age of 82. In fact, we'd be surprised if he doesn't continue working as long as his health permits. Also, it's pretty clear that it's not the money that keeps him coming back to the office every day. In terms of finding satisfaction and value, there are millions of us interested in following his example.

Viewing pretirement as a productive and enriching stage of life can provide tremendous lift when considering your later years. Having to continue working can be viewed as a burden of a tough economy. But having the opportunity to continue adding value during years of pretirement can be liberating and energizing.

Not everyone has the choice of whether they will continue to work. But nearly everyone has control over how they feel about it and what they intend to do with their lives during their later years.

Twitter: @PhilMoeller

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