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YOUR TALENTS ARE YOUR GREATEST ASSET
Today's workers should expect a greater share of the assets they will need in retirement to come from their own savings and employer-based defined-contribution plans, such as 401(k)s, rather than from social security and traditional pensions. But don't panic. Although that situation gives you more responsibility for planning your own retirement, you can also expect help from yet a fourth leg on the traditional three-legged stool: income from a part-time job or a second career. A survey by the AARP found that 80% of baby-boomers say they expect to work at least part-time in retirement, a trend that is particularly pronounced among women. Nearly two-thirds of women questioned by the Women's Retirement Confidence Survey plan to work in retirement.
Sometimes that will be out of necessity, because they simply can't afford to retire cold turkey. Often women continue working out of choice. Many women now in their 50s and 60s are far from ready to retire, having entered the workplace in their 40s once their children were in high school or college. In fact, twice as many women (compared with men) perceive their job or career as enriching their life. And a survey by the National Center on Women and Aging found that women age 50 and older who work are healthier and have a more positive attitude than women who don't.
Whatever the reason, labor-force participation by women in their early 60s has been rising, while the proportion of older men in the labor force has been falling. In the future, employers in need of skilled workers will make it even easier for you to stay on the job. One new trend is "phased retirement." Instead of forcing you to leave at a certain age, employers will let you delay full retirement and work part-time or flexible hours, hire you back as an independent contractor, or use you as a kind of floating temp, plugging you into an interim position or giving you a mentoring role.
The point is, in addition to your 401(k) or IRA (traditional or Roth), you have another major asset that's often overlooked- your own earning power. Just like any other asset, you should cultivate it when you're younger-by taking full advantage of employer reimbursement for education and training to hone your skills and continue to develop new ones-so that you can draw on that earning power in the future.
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