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Introduction: The New Reality of Retirement Planning
For decades, retirement planning followed a familiar formula: work until 65, collect Social Security, and enjoy a few decades of financial independence. But today, that model is being rewritten. Rising life expectancies, unpredictable markets, inflation concerns, and evolving work habits have made the path to retirement far less predictable.
In recent years, research has shown that unexpected health events, caregiving responsibilities, and corporate downsizing are prompting many people to retire earlier than they planned, while others are choosing to delay retirement altogether to maintain financial stability or purpose in their work (1)(2).
In this changing landscape, flexibility is no longer just a nice feature of a retirement plan—it’s a necessity. A flexible retirement timeline can help protect your financial security and peace of mind, even when life doesn’t unfold exactly as expected.
Rethinking the Traditional Retirement Age
The “Retire at 65” Model Is Losing Relevance
The age of 65 once represented a clear finish line. It was tied to Medicare eligibility and traditional pension plans. But for today’s workers, those old markers don’t always make sense. Many people are living longer, healthier lives, which means their savings need to stretch further. Others are facing career or health disruptions that accelerate their retirement plans unexpectedly.
A 2025 report from Financial Planning found that health shocks and job loss are among the top reasons people retire earlier than expected (1). Meanwhile, some professionals—especially those in knowledge-based roles—are choosing to keep working part-time into their late 60s or even 70s to stay active and supplement income.
The Modern Retirement Spectrum
Instead of a single “retirement date,” more people are embracing what experts call phased retirement. This might mean:
• Reducing work hours while maintaining benefits
• Transitioning into consulting or part-time roles
• Taking a sabbatical before fully retiring
• Gradually adjusting lifestyle expenses as work income declines
Phased retirement can help bridge the gap between full-time employment and full retirement, easing both financial and emotional transitions.
The Three Big Forces Driving Retirement Flexibility
1. Health and Longevity Uncertainty
Health is one of the biggest variables in any retirement plan. According to data from LBMC, unexpected medical issues remain the number one reason people retire sooner than they intended (2).
Even with careful planning, a sudden diagnosis, mobility limitation, or need to care for a spouse or parent can upend timelines and financial assumptions. At the same time, many people are living well into their 90s, creating a potential 30-year retirement window to fund.
How to prepare:
• Consider building a plan that accommodates both early and late retirement scenarios.
• Explore disability or long-term care insurance options that could help protect assets if health needs change.
• Revisit your income strategy regularly to account for new medical expenses or shifting longevity expectations.
2. Market and Inflation Volatility
The last several years have reminded investors that market conditions can change quickly. Inflation, fluctuating interest rates, and uneven market recoveries can all affect when and how comfortably someone can retire.
Sequence of returns risk—the danger of withdrawing money during a market downturn early in retirement—can have a lasting impact on portfolio sustainability. As Investopedia notes, building flexibility into your withdrawal strategy can help reduce this risk (3).
How to prepare:
• Consider maintaining a mix of liquid reserves and diversified investments to give yourself options during market volatility.
• Review your withdrawal strategy to help ensure it adjusts for market conditions.
• Reassess your portfolio allocation as retirement approaches to balance growth potential and protection.
3. Evolving Work and Lifestyle Expectations
Work has changed dramatically in the last decade. Remote and hybrid roles, side businesses, and flexible schedules have opened the door for many to extend their earning years—on their own terms.
Some retirees find they enjoy working part-time for the structure and purpose it provides. Others discover that staying engaged professionally helps ease the emotional shift from full-time work to full-time retirement.
How to prepare:
• Explore what a “phase two” of your career might look like—such as consulting, mentorship, or flexible work.
• Incorporate potential part-time income into your retirement cash flow plan.
• Consider how lifestyle preferences may evolve once full-time work ends.
Three Early Warning Signs Your Retirement Age May Need Adjustment
Even a well-built plan can drift off course over time. Watch for these common signals that your intended retirement age might need to be reconsidered:
1. You’re saving less than planned.
If contributions have slowed due to higher living costs or unexpected expenses, your target retirement age may no longer align with your goals.
2. You’re shouldering new financial responsibilities.
Many pre-retirees are supporting adult children or aging parents. These added costs can alter cash flow and delay financial independence.
3. Your health or career stability has changed.
A health event or job transition can affect both income and retirement savings rates. Building contingency options into your plan helps you adjust if these changes occur.
Flexibility doesn’t mean uncertainty—it means being prepared for a range of outcomes instead of relying on just one.
How to Build a Retirement Plan That Adapts
A flexible retirement plan is built on a foundation of scenario testing and regular review. Here are key strategies to help your plan adapt to life’s curveballs:
1. Use a Range of Retirement Ages
Rather than anchoring to one specific age, consider evaluating your plan for several possible retirement scenarios—such as 60, 65, and 70. This can help you understand the trade-offs between retiring earlier or later, and how those choices affect Social Security benefits, healthcare costs, and portfolio longevity.
2. Maintain a Contingency Fund
Holding a few years’ worth of essential expenses in accessible accounts can create breathing room during market downturns or unexpected life events. This reserve helps you avoid withdrawing from investments at unfavorable times.
3. Revisit Your Plan Annually
Even small life changes—such as tax law updates, new spending goals, or a job shift—can ripple through your financial plan. An annual review helps ensure that your timeline, retirement savings rate, and investment strategy remain aligned.
4. Consider Multiple Income Streams
In addition to Social Security and portfolio withdrawals, consider how rental income, part-time work, or annuities could fit into your plan. Multiple income sources can add flexibility and stability when markets fluctuate.
5. Account for Healthcare and Caregiving
Healthcare costs are one of the largest and most unpredictable retirement expenses. Building estimated costs for Medicare premiums, supplemental coverage, and potential long-term care into your projections can help reduce surprises later.
What We’ve Learned from Clients Who Retired Early vs. Later
Advisors who work closely with pre-retirees often see clear differences between those who retire at 59.5 and those who retire closer to 65 or 70.
• Those who retire early often face more years without employer health coverage, longer portfolio drawdown periods, and higher inflation risk. However, they may also enjoy more active years and lifestyle flexibility.
• Those who retire later typically benefit from higher Social Security income, larger retirement savings balances, and shorter retirement horizons. The trade-off may be fewer active years for travel or personal pursuits.
Neither path is right or wrong—it’s about understanding the financial and personal implications of each option. Sound plans leave room for either outcome.
Conclusion: The Power of Flexibility
The retirement landscape has evolved. Health shifts, market volatility, and lifestyle changes are rewriting what it means to “retire.” A flexible plan gives you confidence to adapt—whether life pushes your timeline forward, backward, or somewhere in between.
The key is to approach retirement planning as an ongoing process, not a one-time decision. By reviewing your goals regularly, testing multiple scenarios, and preparing for both expected and unexpected changes, you can make informed choices that support your long-term financial security.
If you haven’t reviewed your retirement timeline recently, consider scheduling a conversation with your advisor to explore how a more flexible plan could work for you.
Sources
1. Financial Planning, “5 Financial Planning Topics to Bring Up with Clients in 2025,” January 2025.
2. LBMC, “Retirement Planning Trends: Why Flexibility Matters,” February 2025.
3. Investopedia, “How Financial Advisors Are Changing Their Retirement Advice,” March 2025.
Disclosures:
Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary, or investment advice. Investing involves risk which includes potential loss of principal. Past performance is not a guarantee of future results. The use of asset allocation or diversification does not assure a profit or guarantee against a loss.
Neither OneAmerica Securities, the companies of OneAmerica Financial, Fuller Financial, nor their representatives provide tax or legal advice. For answers to specific questions and before making any decisions, please consult a qualified attorney or tax advisor.
Not affiliated with or endorsed by the Social Security Administration, the Centers for Medicare & Medicaid Services, or any governmental agency.
