Changes come quick in your 50s. Your energy levels and patience change – usually for the worse. The hour-long train ride to work you once tolerated is now a nuisance. The deadlines you used to thrive on may now be a source of stress. It’s not your fault. At this stage of your career, you’ve been putting up with the daily grind for 25 or 30 years now. And maybe you’ve had enough.
Better yet, maybe you’ve saved enough to say “enough is enough.” This may be the perfect opportunity for you to coast into retirement rather than spend the next 10 years or so hammering away at a job that truly zaps every last shred of energy you have.
The upside of coasting
It’s a pretty tough thing to actually retire in your 50s. Even if you have decent savings, most people’s health insurance coverage is tied to work. If you stop working for good, you may be looking at a pretty lengthy gap between now and when Medicare kicks in at 65. Plus, you may not be done with the large bills. If you had your kids a bit later in life, you might still have some college tuition left to pay. If you have 20-something kids in grad school, you may be partially (or fully) footing the bill so they’re not saddled with debt in young adulthood.
But there’s a huge difference between retiring in your 50s and coasting through your 50s with an easier job. In the latter scenario, you’re not giving up your paycheck. Rather, you’re shrinking it in exchange for an easier, less demanding role – one that pays the bills but perhaps isn’t going to be your ticket to maxing out your 401(k). Now you may be wondering, “Why wouldn’t I just push myself to work a few more years and retire at 60?” And you could. But you’ll still have the issue of health insurance to contend with. And you’ll then be in a position where your nest egg will need to last longer than it would for a mid-60s retirement. If you go the coasting route, you’ll hopefully be earning just enough money to cover your expenses so you don’t have to dip into your savings – even if you’re not adding to them per se. Plus, if you’re feeling completely exhausted from your work schedule now, you don’t want to spend the next five years hating your life. Coasting gets you out of that. You can find a job with more reasonable hours, a shorter commute (or, hello remote work – perhaps no commute at all), and less stress overall.
And to be clear, this won’t automatically mean a smaller paycheck. You could get lucky. But for the most part, you should expect the job you coast with to pay less. It’s a tradeoff, but a worthwhile one.
Can you afford to coast into retirement?
The idea of working a low-stress, lower-paying job over the next decade might sound appealing. But before you hop aboard the coasting bandwagon, you’ll need to ask yourself if you can afford the pay cut that will likely ensue.
Vanguard puts the average 401(k) balance among savers in their mid-50s between $168,646 and $244,750. Granted, these numbers are a bit dated, reflecting balances in 2023. But they tell us that many American workers in their 50s can’t afford to shrink their paychecks when they still have saving to do. If you’ve saved a lot more, to the point where you don’t need your 50s to play catch up, then you may have more leeway to stop saving, take a job that allows you to cover your near-term needs, and ease your way into retirement rather than burn yourself out on the way there. Remember, too, that mental and physical health can go hand in hand. You don’t want to start off retirement with health problems because you pushed too hard in your 50s.
Spending the last decade of your career in an easier job isn’t a failure on your part. It’s a privilege you should be excited to embrace if you’ve set yourself up to be able to do it.
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