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Retire or Rewire?

For Most Women, “Rewirement” is a Better Option than Retirement

This post is brought to sheBOOM by Tony Coretto, entrepreneur, early retiree, and co-founder of LiberateU.


Traditional retirement seems to have gone the way of the dinosaur – it’s long extinct and no longer relevant.

It used to be different. With the Social Security Act of 1935, the average retiree spent fewer than 5 years in retirement before shuffling off this mortal coil. Now the average working woman spends more than 21 years in retirement – that’s 16 more years.

The Great Recession derailed many traditional savings and investment plans. Now more than 30 percent of workers aged 65 or older (traditional “retirees”) are working full- or part-time – and that number will only go up as people live longer and want to earn more to supplement their social security benefits, pensions, and withdrawals from IRAs and 401Ks.

Factor in that the average single American woman approaching retirement age (55 to 61) has only $30,000 in the bank, compared to $34,000 for the average single man– and it’s no wonder that most women today just give up on the idea. That’s not nearly enough to support a retirement of 21 plus years.

But there’s a better way. Instead of following the traditional retirement route – work 40 years and then live off of what you’ve saved – try “rewiring” the way you live and work to provide more flexibility, more freedom, and more financial resources to carry you through a longer working life.

So, how do you “rewire?” I’ve recently gone through this transition myself, and in my experience, preparing for rewirement is a 3-step process:

Step 1: Expand your savings until it hurts.

Save as much as you can while you are still working full-time. This will provide that extra cushion you’ll need to rewire. It may seem impossible to do, especially if you have kids, but some savings experts are recommending that parents favor saving for retirement over saving for college tuition because children have alternative sources of funding available to them (e.g., student loans, their own savings, part-time jobs during the school year) unlike retirement savers. This is especially important for women entrepreneurs, who are often juggling both business and personal funding requirements, with or without kids.

Step 2: Reduce expenses.

In our prime working years, most of us feel that we have more money than time, so we tend to spend money on things that save us time. We eat out a lot because we don’t have time to make dinner. We have our clothes laundered because we don’t have time to wash them ourselves. We pay to have other people clean our houses because we’re working late and taking care of cranky clients. And so on. Getting rid of any expenditure that is not absolutely necessary and doesn’t bring you real joy will help you develop a streamlined lifestyle that you can carry with you into rewirement with no feeling of hardship or deprivation.

Step 3: Explore your options.

While you’re saving like mad and cutting expenses to the bone, you should be exploring all those things you’d like to do when you rewire. What dreams have you deferred? What people do you wish you could spend more time with (hint: it’s probably your  friends and family)? Where do you wish you could travel while you’re still healthy enough to do so? What other ways besides full-time employment can supplement your savings? With over 50 percent of the workforce slated to be hourly workers by the year 2020, there are more and more options to try out, on your own terms, without a full-time job.

It can take years to implement all three of these steps – or just a few months. That depends on you. How dramatically can you curtail your expenses and ratchet up your savings? What options do you want to explore for living and working in rewirement? The important thing is to get started NOW and to re-evaluate as your journey unfolds.

Here are two books I found extremely helpful for my own journey:  “Your Money or Your Life”  by Joe Dominguez and Vicky Robin and “Designing Your Life” by Bill Burnett and Dave Evans of Stanford University. Both are available at your local library, so you don’t have to spend a dime to read them and start your own rewirement adventure!”

Wondering where I got my stats? Read this study on retirement trends and this article on average retiree savings.


Tony Coretto is a heBOOMer contributor and co-founder of LiberateU. Join us for a great online chat about freedom here. Missed it? No problem! If you sign-up we’ll send you the recording.