Baseball legend Leroy “Satchel” Paige was still pitching professionally in his 50s. When asked how he could keep pitching at his age, he replied: “Age is a question of mind over matter. If you don’t mind, it don’t matter.”
I thought of that quote several weeks ago at a luncheon with more than 300 people at the Minneapolis Institute of the Arts. We had gathered to celebrate 50 Minnesotans over 50 who are making a difference in our community. (I was one of the judges.) The award winners are incredibly impressive and deeply engaged in improving the quality of life in our community.
Similarly, the San Francisco-based social venture Encore.org recently awarded its Encore Prizes, which rewards organizations that promote intergenerational ties between mentors age 50 and over and young people. Among the winners was Hire Autism in Arlington, Va. The organization is developing a program that matches mentors with young adults on the autism spectrum seeking jobs.
What do these awards have to do with personal finance? Everything. They have been created to signal to the broader society that older Americans have a lot to offer at work and volunteering. Just as we plan to save for our retirement, so should people spend time figuring out what comes next.
Here are some of the most common choices. Phased retirement with the same employer; negotiating part-time work with the same or different employer; shifting to bridge jobs and encore careers; self-employment or starting a business; and volunteering many hours in the community. Many people end up embracing a portfolio of activities, including work that brings in an income. Earning even a slim part-time income during the retirement years helps pay the bills and stretch out savings. Look at it this way. Say you earn $20,000 in part-time income. That’s the equivalent of a 4 percent withdrawal rate from a $500,000 portfolio.
Too many people still assume older Americans have little to offer. The word “retire” stems from a French word for “withdrawing” or heading into “isolation.” I find the concept of withdrawal is bleak. So, let’s retire the word “retirement.”
A more accurate term may be “sabbatical.” Yes, many people take a break around the retirement years. Yet after taking a welcome break that rejuvenates the spirit, many people find themselves heading back to work.
A thoughtful plan for returning to work hikes the odds of finding something that offers both meaning and money.
Chris Farrell is senior economics contributor, “Marketplace,” commentator, Minnesota Public Radio.