When you reach a certain age, retirement is on everyone’s mind. And the age varies.
Several of my schoolteacher friends reached retirement age a couple of years ago. Retirement was a hot topic for the then 54-year-olds. Many were exploring second careers, going back to school, or spending more time with adult children and grandchildren.
Among friends in my lawyer circle, the age for discussing retirement is much later. I talk with 80-year-old lawyers who tell me they aren’t ready to retire. However, the pandemic is shifting retirement plans for many Americans.
A November study from the Pew Research Center found the number of Baby Boomers who reported being retired had increased compared to previous years – 1.2 million more than the historical annual average.
A recent New York Federal Reserve survey found the number of people expecting to work beyond age 67 fell to a record low of 32.9%.
And finally, a recent U.S. Census Bureau survey shows 2.7 million workers aged 55 and older plan to apply early for Social Security benefits. This is almost twice as many as the 1.4 million people in the same age group who plan on working longer.
Life is Short
There are many factors from the pandemic that have caused people to consider early (earlier) retirement.
With so many people working remotely for such a long time, the prospect of resuming a painful commute and working in an office is no longer desirable.
Sally, an accounting manager for one mid-size law firm, has said she won’t go back to the office even when it is fully re-open for business. She will continue remote work and only go in as needed. She’s also contemplating a quicker move to part-time and ultimately early retirement. She says her priorities are different following the pandemic. She wants more family time and more down time.
Another factor in the decision for early retirement is the changing face of work. Many senior lawyers have made the transition to remote or created a hybrid environment, but never enjoyed it. The practice of law has been changing for years and some senior lawyers found 2020 was the final straw. It seems easier to wind down the practice than to retool their practice or even more difficult, retool their mindset.
In an April 2021 Crain’s Chicago Business article, a cancer survivor says his cancer scare of a few years ago, coupled with being stuck at home for a year had him reconsidering his commitment to climb the corporate ladder. At age 58, Craig chose to retire early from his career at 3M Company.
In the same article, Melissa, also 58, retired from her job overseeing state parks for the Massachusetts Department of Conservation and Recreation. She retired 5 years earlier than her original plan and there were a few considerations. One, she was tired of working more with less. She was responsible for hiring hundreds of seasonal workers for the state parks. But even as attendance at state parks was booming as visitors escaped pandemic lockdowns, the state cut the seasonal administrative staff that helped her screen candidates. While her pension will be smaller, her retirement investment accounts have fared favorably. Also, Melissa says, “I’ve seen so many people who have decided to wait too long to retire – many of my colleagues or older family members – and they get one year of retirement and get sick and pass on. I don’t want that.”
What is the average retirement age for lawyers?
BigLaw firms are usually the only law firms with mandatory retirement ages, and those can vary from 65-75 with age 70 as a common choice.
For solo and small firms, it can vary wildly.
And even after retirement, many lawyers don’t plan to stop working. You probably know a lawyer who has retired from their law firm, only to set up their own shop, or join another firm as “of counsel”. An Altman Weil 2007 Retirement Survey found that 29% of lawyers plan to retire “later”, 4% do not plan to retire at all, and 11% are unsure (compared to 27% who plan to retire early and 29% who plan to retire at retirement age).
Of those surveyed, 61% plan to continue working in some capacity after retirement, and of those, 48% will continue to practice law.
The New Normal Surrounding Retirement
Today there are more programs than ever about retirement and succession planning for lawyers available via books, podcasts, CLEs, and bar journals.
My consulting experience shows more frequent calls about a path to retirement, as well as younger lawyers calling to discuss succession planning. Lawyers in their 50’s want to make sure they have a good plan in place. And often, their motivation is the 75-year-old lawyer down the hall who won’t call it quits.
Is the pandemic shifting your retirement plan? What can you do to prepare? Here are 3 steps you can start today.
- Research. It’s never too early to read a book, sign up for a CLE, or speak with a consultant. There are many factors to be considered before retirement including your physical health, the health of your practice and client base, and your emotional readiness. Understanding the issues and questions that arise as other lawyers prepare for retirement will help you prepare.
- Maintain an identity outside of practicing law. Making sure that you live a well-rounded life will help you prepare for Life after Law. Lawyers often worry about what they will do in retirement because they have few hobbies, interests, or friends outside of law. Their career was all consuming. If you can avoid this trap, Life after Law won’t seem so daunting.
- Financial Readiness. Financial worries prevent lawyers from retiring. Reaching your financial goals will be hard if you never set goals. It is important to start working with a financial planner early in your career to have guidance from an expert, but also to have a plan in place and accountability to fund your plan.
About The Author
Camille Stell is the President of Lawyers Mutual Consulting & Services and the co-author of Designing A Succession Plan for Your Law Practice: A Step-by-Step Guide for Preparing and Packaging Your Firm for Maximum Value. Continue this conversation by contacting Camille at firstname.lastname@example.org or 800.662.8843.