You are going to work for a long time. Here’s how to build a financial foundation where work can start, stop and start over

You are probably going to have to work longer than you imagined when you first started out. After all, you could live to be 100 years old.

So let’s call it a 50 year career, at least. It is a long stretch without interruption. But what people seem to have learned during the coronavirus pandemic is that choosing to be out of the world of work for a while can be quite enjoyable, if not preferable.

This raises a challenge: how to create a financial base for a new kind of career longevity, in which work can start and stop and start over, perhaps multiple times.

Traditional personal finance infrastructure doesn’t make it easy. The earlier you benefit from the Social Security retirement pension, the less you will receive. Other retirement savings vehicles usually have their own restrictions. Finding and fighting for health insurance is a full part-time job. Many forces conspire against the Peripatetician.

Even so, everyday employees, especially younger ones, are looking for ways to do it. “There is a very short list of good sides to the pandemic, but one of them is that people have really spent time thinking about what is important to them,” said Ann Garcia, 54. , financial planner in Portland, Oregon. “And many conclude that their job is not this one.”

It’s tempting to rush headlong into financial advice here. Roth IRAs can be your friends whether you’re young and envisioning a hiatus in a decade or mid-career and thinking about taking one next year. Try to amass rental income or other passive income. And make a health insurance plan.

But Kevin Mahoney, 37, a financial planner in Washington, DC, who advises many his age, recommends a step or three of soul-searching before doing anything else.

“What’s important to you? Why? And what’s stopping you from doing that?” He said, recounting some of the first questions he suggests new customers ask themselves. , especially those who wish to pursue a non-traditional career path. “The tactics – which retirement accounts to use and things like that – are all very secondary.”

So ignore the counts, at least initially. But any notion of a hiatus requires accountability to your stakeholders, whether you intend to rest, restart, or completely reinvent your working life.

The primary person in the decision should be your spouse, if you have one. After all, if you need that person to maintain health insurance and regular income, it puts pressure on them. This is not the kind of situation where asking for forgiveness is better than asking for permission.

Then think about what your life would be like. Your spouse and children, if you have either, may not want you as much. And if you are single, the silence can rejuvenate for a while.

It is only after the self-examination that the practical financial aspects come.

In an ideal world, you have savings that you can use without any restrictions or tax implications – or some sort of passive income, like that from a rental property. Maybe there is equity in your home that you can extract, or an inheritance.

But if you don’t live in a world with such privilege, there are workarounds. For example, some people can withdraw their 401 (k) or 403 (b) money without penalty as early as the year they turn 55. Public security employees can do this from the age of 50.

Did you start a Roth IRA when it was created a few decades ago and are running out of other savings to tap into? You can withdraw contributions (but not income) without tax or penalty.

This is one of the many great reasons to start a Roth if you are younger and hope to go out for a bit in a decade or two. And if you have access to a 457 (b) Workplace Retirement Savings Plan, you can use the money when you leave a job, without penalty. (That said, you lose the compound interest benefit on that money once you take it out – so plan wisely and spend as little as possible.)

If you’ve gone this far in your planning, you’re in luck. But it is necessary to consider a few other ways that things could get financially complicated.

You may face the sudden need to care for an aging parent or a sick spouse, or to help with the personal or professional difficulties of a young adult child. When that happens, you run the risk of running up against a wall of uniquely American malfunctions.

“We don’t value care, we don’t pay family members for care, and we underreward professionals,” said Marci Alboher, vice president of Encore, a nonprofit that tries to bridge the generational gap.

In addition, there is no forecast of business cycles and other calamities. Imagine planning to return to the hospitality industry in the spring of 2020 – or almost any job in early 2009, in the depths of the latest financial crisis. Any money model for a short-term break should include a simulation plan for a scenario where it takes you twice as long as expected to start making real money again.

Finally, a warning. If you opt out when you’re older – or even when you’re only 40 – you may face age discrimination when trying to return to the workplace. In advertising, technology and many other fields, the skepticism on your part will be real. And if you are a woman or a person of color, your age can only amplify these other prejudices.

While the elderly are a protected class for the purpose of discrimination, diversity initiatives that make a much needed appearance seldom include people who are decades into their working years. If you’re lucky, your age will only grow arched eyebrows during your interview.

But there may be a growing appreciation for what older people can bring to a team, said Alboher, who is 55 and author of “The Encore Career Handbook.”

“They have gone through many economic cycles,” she said. “And they’re not at a point in life where they need to collect a wide range of experiences. They often dig and stay.

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