The Changing Face of Retirement
“Retirement used to be a binary decision, you either worked or you didn’t, and everyone stopped work at the same time. Now we are seeing a much more continuous process”
Dr. Andrew Scott,
Professor of Economics, London Business School
These days, the definition of retirement is changing.
Retirement is Not An Age, it’s A Lifestyle
Retirement is about having the freedom to spend more time on things we enjoy, with people we love. And in this era with hybrid working and flexible work options, we no longer need to wait till a certain retirement age to start living our desired lifestyle.
Retirement also doesn’t necessarily mean no more work.
In fact, many people these days prefer to continue working if they are healthy because it allows them to stay mentally engaged and socially active. However, they don’t want to work at the kind of intensity and stress level of a full time job. What they want is meaningful, interest-based work that gives them the flexibility to still enjoy their retired lifestyle.
The Rise of Hybrid Retirement
Hybrid retirement allows one to start enjoying a retired lifestyle from an earlier age such as in their 40s or 50s while continuing to work in some capacity. It offers the best of both worlds – the personal satisfaction of more leisure time and the financial benefits of income from work.
Personally, I’ve noticed more people adopting the hybrid retirement lifestyle as they pivot into fractional consulting roles, interest-based projects, part time work or self employment. Many are happy to have more flexibility in their schedule to take care of their health and experience life.
However, the problem is that income from flexible or fractional work can be irregular and tends to be less than of an equivalent full time job. This is why it’s important to plan ahead and build up a stable financial base to cushion the transition.
Recently, I spoke on the financial aspects of planning for a hybrid retirement at a webinar hosted by The Courage Chapter – a company that helps senior professionals transition to their next chapter through matching them with meaningful, flexible projects with companies.
From Accumulation to Income-Based Planning
Traditional retirement planning focused on accumulating a substantial nest egg. With changing work patterns and life expectancies, the focus has now shifted to income-based planning. It’s no longer just about saving a lump sum but about ensuring steady streams of income.
The key is to create passive income streams that reduce your reliance on a full-time income. This approach frees you to take on fractional work, or pursue passion projects that may not pay as consistently but offer much more personal satisfaction, without worrying about money.
Planning ahead and building up multiple income streams while you are still working will smoothen the transition to your next chapter. It will allow you to truly enjoy hybrid retirement without financial stress.
Setting Up Multiple Income Streams
A key aspect of modern retirement planning is setting up multiple income streams. Diversifying your sources of income can provide financial stability and peace of mind.
Here are six potential income streams to consider:
1) Rental Income from Property
2) Dividends from Investments
3) Bond Coupons
4) Bank Interest
5) CPF Life payouts
6) Private Annuity payouts
Diversification is Key
Some income streams are variable and depends on the market e.g rental income and dividends, while others like bank interest, CPF Life and private annuity payouts tend to be more consistent.
Learning to diversify your income portfolio is essential to mitigate risks and ensure a reliable income flow. Balancing between different types of income can provide you financial security against market volatility and economic changes.
Your Personalized Retirement Plan
Every individual’s retirement needs are unique. A personalized income portfolio tailored to your specific situation can make a significant difference. Reach out to me for a complimentary consultation to customize your retirement income strategy and secure your desired retirement lifestyle.
By embracing the changing concept of retirement and planning strategically, you can ensure a fulfilling and financially secure retirement. Let’s take the first step together towards a brighter, more flexible retirement future!
To Your Success and Happiness,
Yong Hui
