The way people think about retirement is changing. For one thing, the past few years have been *a lot.* Combine that with dwindling federal benefits and big-time doubts about the future, ya know, in general, and it’s no wonder that many of us are rethinking our relationship with work altogether. That includes when, how, and to what extent we plan (or hope) to leave the workforce.

Previous generations worked at one employer their whole careers, saving and planning for a complete break from employment at 65. For most of us in the workforce now, on the other hand, our careers have been defined by a lot more unpredictability. We don’t even know what the world of work will look like when we approach “traditional” retirement age. So it makes sense if you’re thinking you might want to do some things differently. Or at least hedge your bets a little so it’s easier to change your mind along the way.

Here are the two big things to think about in order to give yourself a little more flexibility with your retirement goals.

1. What a “non-traditional” retirement could look like

In this context, we’d define “non-traditional” as anything that falls outside that “work full-time until you’re 65 and then stop cold turkey” model. For example:

Do you want to retire “early”?

The idea of early retirement might conjure images of tech founders who quit working after a big IPO made them rich, or of people who pinch pennies on big salaries and then suddenly stop working at age 35. But the truth is that “early” is subjective, even under the traditional retirement model. Consider:

• You’re allowed to start withdrawing from retirement accounts like a 401(k) or IRA without penalty at 59 ½ …

• … but you have to wait until you’re 65 to start pulling from Medicare.

• You can start drawing on Social Security benefits as early as 62 …

• … but if you want to get maximum benefits, you have to wait until your “full retirement age,” which, if you’re born after 1960, is 67.

So technically, you can have had a lengthy career and still, if you retire at 60, be considered “retiring early.”

How do you see yourself transitioning away from paid work (if at all?)

Nowadays, we often find that the retirement question isn’t so much about when you want to stop working — it’s about when you want to stop relying on a full-time job for income. Which isn't (necessarily) the same thing.

It doesn’t have to be all or nothing anymore. You might be more willing to work longer if you can have more flexibility in how or where you work. You might decide to leave your full-time employer at 55 but still do some à la carte consulting into your 70s. Or maybe you want to build up enough of a retirement fund to leave your job and open a bookstore without having to depend on those profits for income.

2. What you might do differently to get there

If you are thinking that 65 feels too far away to wait for freedom — or that “retirement” is likely to mean something different for you — your approach to financial planning isn’t going to be as simple as the save-and-bounce model of our parents’ pasts. But it’s definitely not impossible!

Here are some factors to consider.

How and where you’re going to invest

Making plans about what to withdraw, from where, and when: That stuff will come later, when you sit down with a financial planner closer to the date. Right now, your priority is to put together a plan and invest to get on track for it as soon as possible.

The question, then, is what kind of account to use. IRAs and 401(k)s make you wait to withdraw until you’re 59½, so your first thought might be to use a taxable (regular) investment account instead, or split your deposits between them. But that’s not necessarily the way to go.

Regardless of when you decide to retire, the majority of your retirement will ultimately (hopefully!) take place after 59½, so you’re likely to only need a few years of flexibility. And while traditional IRAs are pretty ironclad when it comes to those restrictions, many others are either more flexible or come with exceptions. For example:

• Roth IRAs: You can access your own contributions to a Roth IRA without penalty anytime, because that money’s already been taxed. (You’ll have to wait until you’re 59½ to withdraw the earnings, though.) If you have a Roth 401(k), you can plan to roll it over into a Roth IRA and do the same thing — your IRA just has to be five years old by then.

• 72(t) payments: Aka the “Substantially Equal Periodic Payment rule,” this lets you pull from your 401(k) or IRA early and avoid the 10% penalty if you set up a specific schedule and stick with it for at least five years.

• Rule of 55: Once you turn 55, you can tap into the 401(k) associated with the company you were working for at the time of your retirement. (So, this doesn’t apply to 401(k)s you have with previous employers.)

In general, as long as you aren’t planning to retire super early, you’ll get a good amount of flexibility by prioritizing your Roth accounts. But that depends on how much you’ll have contributed by the time you retire. If you don’t think Roth contributions can cover the gap, you’ll probably want to invest some of your retirement in a taxable account, too.

That said, everyone’s retirement situation is unique, so we strongly recommend working with a financial planner to figure out the strategy that works for yours. (Save the DIY for fixing your garbage disposal, not your plan for the future.)

Social Security

You can technically start withdrawing from Social Security as early as age 62, but if you do, you’ll only be able to pull 70% of the maximum benefit amount from then on out. That benefit increases the longer you wait, every month until you reach 67 and even after. (There are extra rules if you’re taking benefits early and still earning income.)

That said, regardless of whether you’re planning on a traditional or non-traditional retirement, we recommend thinking about government benefits as extra. Because even if you wait until you can get the max benefit, that’s likely to amount to less than $4,000 a month — before taxes and the cost of Medicare. Combine this with the projection that Social Security may be reduced for future retirees, and it’s a pretty unstable foundation to stand on.

Healthcare

Medicare benefits are only available when you turn 65, so if you quit your full-time job at any time before then, you’re going to need to fill the health insurance coverage gap yourself. That means higher out-of-pocket costs.

If your early retirement is going to come “later” — say, in your late 50s or early 60s — you might be OK extending your existing plan with COBRA. Otherwise, you’ll have to buy private insurance on the public marketplace (if that’s even still a thing by then), and those premiums will probably be higher than whatever you paid at your job. On top of that, healthcare is liable to get more expensive overall as you get older. So if you plan to break with your 9-to-5 before 65, you’ll want to invest more to account for that.

Investing more

This is the big one: If you leave the full-time workforce earlier than the traditional age, you’re gonna need to invest a lot more money. Not only because you’ll be relying on that money for longer in retirement (so you need it to last longer), but also because the money that you do invest won’t have as much of a chance to compound while it’s invested.

In order to know how much more you should be investing, you could take a guess at your pre-retirement income — aka salary in the last year before you retire — and multiply that by the number of years between retirement and, well, death. Ellevest Plus and Executive members can use our investing platform’s Retirement goal, which uses gender-specific salary curves to do this for you, then recommends how much to invest on a monthly basis to give you the best chance of getting there.

But in a non-traditional case, the most effective way to come to a number is probably going to be estimating what your expenses will look like in retirement — what will you need every year to cover your post-work life? Do your best to estimate that number, and then do your multiplication. (Then use that as your target income in your Retirement goal.)

This is uncharted territory — ask for help

If these factors all sound like a lot, take heart: Creating an alternative retirement plan is nowhere near as stressful or difficult as it may appear. The trouble is that retirement is unique to the person doing it, and the strategies aren’t one-size-fits-all. Standard advice can only get you so far.

We strongly recommend working with a financial planner to build a plan that’s as unique as you and your goals are, to give you the best possible chance of achieving them. Ellevest’s 1:1 Full Financial Planning Package pairs you with an Ellevest CFP® professional who will work with you to build an actionable, flexible plan based on your goals and your current finances to get you started on the right path.

No matter what your retirement plans are, though, the best thing you can do for Future You is this: Start now.

Disclosures