How to Get Creative With Your Retirement Plan

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Does hearing "Retirement Planning" make your palms sweat?

You have a lot of options when it comes to saving for retirement— 401ks, IRAs, Roth IRAs— the delicious alphabet soup runneth over. While these are solid retirement account options, they are more powerful the earlier you get started. But what if you didn’t get an early start?

I won’t sugarcoat the truth: saving for retirement is much easier when you have time on your side. But I also won’t dwell on that fact because that doesn’t help you move forward. And yes, you can move forward. Sure, a late start when it comes to saving for retirement is real. But there’s no such thing as being “too late.”

However, because you’re just getting started now, you’ll need to supplement your IRA with other retirement accounts, and some creative ways to rethink your retirement plans.

Here are three creative ways you can catch up to your retirement goals:

1. Downsizing Early

Typically there is a phase in life when people decide it’s time to “downsize.” This has become an unofficial part of the retirement process in America: you turn 67 and it’s time to cash in on your Social Security checks and move into a smaller pad. If you find yourself trying to find ways to bulk up your retirement accounts, why don’t you try downsizing early?

If you’re living in a house with more space than you need, you’re also spending more than you need to. The size of your house has a pretty obvious direct relationship to how much you’re spending; a bigger house means a higher rent or mortgage, higher costs for upkeep, higher property taxes, mo’ money, mo’ problems.

If you downsize earlier (say, in your 50s instead of your 60s), you can take all of the money that you were spending on a pricier home and throw that cash into your retirement accounts. If you own a house, maybe you’ll be able to sell it for a profit and you can put that lump sum into your retirement fund. Of course, if you own a home, you’re not guaranteed to make a profit when you sell, but that’s a whole other article (this article in fact). Anyway. Unless you’re headed for the super luxe Betty White retirement life, you’re going to downsize anyway. Why not do it now?

2. FIRED Movement

You may have heard of the FIRE movement, which stands for “Financial Independence, Retire Early.” This became a popular move in the 2010s when young people would save aggressively—like 50 to 75 percent of their earnings—so that they could retire by thirty-five or forty.

The FIRED movement stands for “Financial Independence, Rethink Early Deadline.” Did I just make this up? Yes. Am I proud of it? Also yes.

You may want to rethink your retirement deadline, because some of the richest people out there are also the ones who work the longest. Half of the people making more than $750,000 a year say they will never stop working (myself included). For example...

• Oprah is sixty-seven years old

• Martha Stewart is eighty years old

• Warren Buffett is ninety-one years old

• Helen Mirren is seventy-six years old

• Joe Biden is seventy-nine years old

• Morgan Freeman is eighty-four years old

I’m not here to glorify working until the grave, but it is important to think about what your preferences are now and what money you will need if those preferences change (and they likely will) later on. If you retire at 70 instead of 67, you’ll have three more years of income to play with. Will that help you make progress toward your retirement goals? That’s a question only you can answer, but I’m guessing the answer is yes.

If the idea of holding your same job until you’re 70+ makes you exhausted, or just plain bored, I have another idea for you. It's...

3. Mini Retirements

What if you didn’t work for forty years to try and save a bundle for some grand finale? What if, instead, you added an “s” onto “retirement” and took several smaller retirements instead? Because you know that I love breaking everything down into baby steps and then those steps into even tinier steps, you might not be surprised to know that I like breaking down retirement goals as well. I’ve decided that, for the rest of my career, I’m going to aim for several mini retirements of one or two years each. That way, they are not only more manageable to plan for, but I can go back to work part-time or full-time feeling reenergized—without being totally out of the loop. I’ve done one mini retirement so far. I took myself to Cabo San Lucas, Mexico, to make up for missing that particular rite of passage in my teens and twenties. During those “prime” years, I was busy raising the career bar while other girls my age were busy dancing on it (no shade if that was you—you do you, boo).

I reserve the right to change my mind, but I know I’ll be bored in full retirement mode with no end in sight. Plus, mini retirements can help to stave off burnout. If you’ve been thinking of burnout as a mental issue and not a financial one—well, you couldn’t be more wrong. Few things drain money and resources faster than burned-out employees.

When you’re disengaged, everyone loses: our healthcare system, your employer, and, most of all, you. Think of all of the opportunities you’re leaving on the table because you can only go after them half-speed. Nurturing your wealth and your well-being not only should, but must, go hand-in-hand.

xo,

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