We all know what retirement once meant. The average worker spent 35 or 40 years at the same company, earned a nice pension, then played golf every day.
Of course, that vision of retirement has changed. A survey of workers ages 33 to 52 found that 80 percent expect to work for pay during retirement, according to Kiplinger.com. Compared to their parents’ generation, new retirees are often younger and remain active in their fields. This is especially true for IT professionals.
Many IT execs are finding that retirement will be possible long before they had planned, with stock options and bonuses helping them achieve financial security. And a recent survey of federal agencies found that 45 percent of senior-level IT workers will be eligible for retirement within the next five years.
Whatever the reasons behind their decisions, IT executives are looking at retirement as an opportunity to start a new phase in their careers, one that involves a greater level of freedom to pursue part-time work like consulting and freelancing. In this article, we’ll look at retirement trends and offer some helpful retirement planning sites.
Emerging retirement trends
George Stiles, managing partner of Executive Options,a Boston career-transition firm, said many of his clients considering retirement are looking to the same type of work, just less of it.
“Although the majority of people continue in their field and replicate the position they had previously or [something] similar to it, an increasing number of people are totally redefining what work means to them,” Stiles said. “They’re deciding that they don’t want to climb the corporate ladder anymore. They’re saying, ‘I’d like to take that tradeoff of the uncertainty of not having a full-time job for greater control over my schedule and more time with my family. I want to go out and sell my skills to the highest bidder for a month or six months.’ They’re getting more satisfaction out of it than moving up the corporate ladder.”
Fewer retirees are taking on just one assignment at a time, he added.
“We’re seeing more people cobbling things together. They’re getting on boards of companies, hiring themselves out to a handful of emerging companies, being more satisfied with what work means to them,” Stiles said.
Part of the shift is a growing trend toward executives wanting to “give something back.”
“We’re seeing people who have achieved a lot. There is an increasing number who decide they don’t need to be a CIO or CTO any more,” Stiles said. “They’re taking lower paying, lower-pressure jobs with nonprofits or public-sector [organizations]. They’ve made enough money, and the kids are gone.
“A lot of them are getting involved in community volunteer work,” he continued. “Here in Massachusetts, one of our biggest industries is education. There are 70 colleges and universities in the greater Boston area. A lot of retirees are going into teaching. We’re also seeing them getting involved in nonprofits or businesses that have more of a social bent to them. We just had a client who went from a multi-million dollar medical devices firm to the small company that manages a chain of charter schools. It’s really great to see that happening.”
Unfortunately, many IT professionals are being forced into early retirement. There’s no question that IT jobs are plentiful, especially at the senior level, yet many companies are pushing out some of their highest ranking employees due to buyouts, mergers, and cutbacks. To add to the problem, CNET News.com reported in November that many CIOs may be looking for new jobs after Y2K because the success of their decisions has come under scrutiny. Many will be pushed out by angry CEOs who question their vision, buying decisions, or ability to stay on top of new trends.
Getting advice online
As the definition of retirement continues to change, so does retirement planning. More and more companies are removing themselves from the pension planning process and leaving employees to make their own decisions for their retirement future. As a result, many IT executives who are in the late stages of planning their retirements, are finding success online.
Just over the last year or so, personal investment advice has become available on the Web. Most advice services rely on a team of financial analysts to generate investment recommendations. Here are a few to choose from:
- · 401k Forum provides customized 401(k) plan investment advice on a plan by plan basis. Saving and investment advice is specific to the user’s plan and includes a customized Web page.
- · Fidelity Investments,the Vanguard Group,Merrill Lynch, and State Street have rolled out low-cost advice services targeted at the 38 million investors who participate in 401(k) plans.
- · Financial Engines differs from its peers in the online advice market. Instead of relying on human advisors, the site’s automated advice system computes the probable long-term value of an investment portfolio, taking into account ranges of interest, inflation, equity, returns, and dividends.
Here are some additional sites that can answer your retirement planning questions:
- · Aetna Financial Services offers advice on retirement and advice on what to do with the money in an employer-sponsored retirement account.
- · Harvest-Time, Inc., maker of retirement-planning software, has created a Retirement Planning Library that includes news, articles, and retirement facts.
- · Kiplinger.com, an online version of the investment magazine, offers an IRA toolkit and advice on getting the most from your 401(k).