Have Fun Now, Retire Later

By the time you are nearing the pre-retirement years, you've probably heard all that nose-to-the-grindstone advice hundreds of times: Work longer. Cinch the belt tighter. Plow as much as possible into your 401(k) because you might live to be 100 and you'll need that money later.

Yes, but what if? As in, what if you are impatient to start doing some of that travel you planned to do when you retire? What if you don't want to defer the tennis lessons or woodworking shop or multi-generational family trip until you are 70? What if you don't expect to live forever?

That conflict - live for today, plan for tomorrow - is said to be the central challenge of life. Rhythm and blues singer Drake solves it in "The Real Her" with the lyrics: "Party tonight." But surprisingly, so do some financial industry experts. Most notably, those from fund and 401(k) company T. Rowe Price Group Inc.

The company has created a new publicity campaign called "practice retirement" through which it is urging baby boomers to keep working, but to start spending more on pre-retirement fun, even if it means they have to stint on retirement plan contributions.

"Delay the date, but not the gratification" of retirement, said Christine Fahlund, a senior financial planner for the company.

Fahlund's approach is based on T. Rowe Price research that shows the following: Stopping work early or starting to take Social Security benefits early can really sap income from the later years of retirement. But cutting back on retirement contributions in the later years of work is far less damaging.

And those fun activities may be more affordable while you're still working. Consider Pat Killian Vesperman, a senior analyst with Verizon in Mahwah, New Jersey, who, at 59, is starting to segue into retirement with more real-estate scouting travel, and treating herself to some fun along the way. She knows her budget will probably require a move away from the costly New York suburbs when she does retire, but that hasn't stopped her from sharing season tickets to the Yankees with her daughter while she's there.

"Having gone through breast cancer nine years ago, the one thing I would like is to learn a little more about getting the most out of today. I don't look as far ahead as other people might."

So Vesperman spends vacations scouting for her retirement home in places like San Antonio, Texas, and Tampa, Florida. She's not in a particular hurry to retire; she thinks she would enjoy moving to a cheaper and warmer clime and keeping her position for a while.

Here are some more ideas about how to have the fun now without blowing through the resources you need for later.

-- Don't quit your day job. That is the key to the T. Rowe Price approach. Giving up income and benefits AND starting Social Security will set you back, so plan to keep working if you can.

-- Consider less work. AARP rewards its older workers with a pre-retirement schedule, says Gabrielle Redford, editorial projects manager for AARP The Magazine. If you can't work part time, maybe you can at least squeeze an extra week or two of vacation out of your employer. Even if you have to use a few weeks of unpaid leave, that can get you the time for a special trip without really setting back your long-term plan.

-- Do some retirement adventures now. Think about the special trips you are putting off until retirement and try to figure out whether they are do-able now. It might just take some creative planning to start knocking off your bucket list early. International Living magazine is hosting a contest that will afford one winner a one-month free 'retirement test drive" in Nicaragua, for example. ().

Why not take the anniversary cruise or three-week European sublet while you are on vacation, instead of waiting until you've finished work?

-- Use pre-retirement to set the stage for post-retirement fun. If you want to golf in retirement, buy your clubs, your pro lessons and your course membership while you can afford them. Buy the camera, the high-end sewing machine, the fitness equipment, the power tools or the boat before you give up your paycheck. With apologies to those who sell mutual funds, consider it a retirement investment.

-- Scout out the future. Like Vesperman, you can take your vacations where you expect to retire. That doesn't just give you the fun of a vacation, it lets you drop into your next stage to see if you like it. After all, it's better to know that before you hand in your resignation, post that "for sale" sign and do something really permanent.

"Delay the date, but not the gratification" of retirement, said Christine Fahlund, a senior financial planner for the company.

"Having gone through breast cancer nine years ago, the one thing I would like is to learn a little more about getting the most out of today. I don't look as far ahead as other people might."

Here are some more ideas about how to have the fun now without blowing through the resources you need for later.

-- Don't quit your day job. That is the key to the T. Rowe Price approach. Giving up income and benefits AND starting Social Security will set you back, so plan to keep working if you can.

Why not take the anniversary cruise or three-week European sublet while you are on vacation, instead of waiting until you've finished work?