You’re probably going to need to work longer than you imagined when you were first starting out. After all, you might live to be 100.
So let’s call it a 50-year career, at least. That’s a long stretch without interruption. But what people seem to have learned during the coronavirus pandemic is that choosing to step out of the working world for a while can be rather pleasant — even preferable.
That raises a challenge: How to create a financial foundation for a new kind of career longevity, one in which work may start and stop and start again, perhaps several times.
The traditional personal finance infrastructure doesn’t make it easy. The earlier you draw on Social Security’s retirement benefit, the less you receive. Other retirement savings vehicles generally have their own restrictions. Finding and fighting for health insurance is a part-time job in its own right. Many forces conspire against the peripatetic.
Even so, workaday employees — particularly younger ones — are scheming ways to do it. “There’s a really short list of silver linings to the pandemic, but one of them is that people have really spent time thinking about what’s important to them,” said Ann Garcia, 54, a financial planner in Portland, Ore. “And a lot are concluding that their job isn’t it.”
It is tempting to rush headlong into financial advice right here. Roth I.R.A.’s can be your friend, whether you’re young and contemplating a break in a decade or in the middle of your career and thinking about taking one next year. Try to amass some rental or other passive income. And make a plan for health insurance.
But Kevin Mahoney, 37, a financial planner in Washington, D.C., who counsels many people around his age, urges a beat or three of self-reflection before you do anything else.
“What is important to you? Why? And what’s stopping you from doing that?” he said, recounting some of the first questions he suggests that new clients ask themselves, especially those who want to pursue a nontraditional career trajectory. “The tactics — what retirement accounts to use and things like that — are all very secondary.”
So ignore the accounts, at least at first. But any hiatus notions do require an accounting to your stakeholders — whether you intend to rest, reboot or utterly reinvent your working life.
The primary person in on the decision should be your spouse, if you have …….