LOS ANGELES (CBS) — At a time when many people are worried about retirement money, you might be surprised some people are advising you can actually enjoy life sooner.

They call it practice retirement where you work later, but enjoy sooner. It can be a bit of a catch-22.

“All you hear about anymore is doom and gloom and that Social Security won’t be available for someone that’s my age and that the future looks very bleak,” said Collette Williams of Mission Mission Viejo.

Williams said she saves at least 10 percent of her income towards retirement. But she said that she worries by the time she is 60, she may not have enough.

“In the market anything can change anytime,” she said.

Williams’ is not alone. The economists at T. Rowe Price have come up with the unconventional “practice retirement” plan.

“I could start practice retirement now,” Williams said laughingly.

In a way she already is just by saving.

“If you’re starting in your late forties or early fifties, you still have time,” financial advisor Alex Collins said.

The experts at T. Rowe Price suggest that 60 is the magic number.

Once you hit it they suggest you keep working, but stop saving for retirement.

They advise to take the money that you were previously putting into you 401k or other retirement accounts and — brace yourself — spend it on fun stuff.

“I like the idea because it says the future is optimistic and that there’s fun on the horizon and you’re always reaching for a goal,” Williams said.

“If you were an art expert and you saw something that was a deal and you said, ‘I’m going to buy this Picasso.’ Buy it if you can afford it. Put it away, more than likely down the road, he’s not painting anymore, it’s going to be worth more money,” Collins said.

Seem crazy? Well we asked Collins, who does not work for T. Rowe Price.

He said the idea may not be all that farfetched.

“If you’re going to continue to work, you ought to be able to enjoy the fruits of your labor. Go out to dinner. Buy the boat that you’ve been wanting to get. There is no reason not to, as long as you’ve got your backstop,” Collins said.

The backstop is your hard-earned money sitting in retirement accounts, growing as you keep working –and spending.

“It’s all predicated on having that money up front by the time you’re 60,” Collins said.
So how much is enough? Well that all depends on your lifestyle.

Collins said that most 60-year olds need over $600,000. But the longer you work without tapping into your retirement, the less you need.

“The whole point is to keep that money making money,” Collins explained.

But he said the plan may leave some short changed, since it does not address hyperinflation or Social Security.

“The only problem I have is I’m not so sure where Social Security is going to be,” he said, adding that he wonders how you can practice retirement when you are still working.

“How are you going to have the time to go to Europe, to go to the Bahamas,” Collins questioned?

Like more and more Americans, Williams will likely have to work into her sixties, but she said that she loves her job as a manager for a business travel company and does not mind saving along the way.

“If you look at it as doom and gloom and I have to, I must, it becomes arduous and a chore. But practice retirement might give a fresher outlook to something that’s really important,” she said.

AARP said that practice retirement could be a realistic option, but you need to pay attention to the catch. As always, consult with your financial adviser.


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