Retirement now looms large for many baby boomers—and to be frank, many of us are scared. For many years, we’ve been used to making pretty good money; and it’s quite daunting to contemplate how much capital it’ll take to replace those big incomes.

Let’s say you’re one of the fortunate ones, and earn $100,000 a year. If you want to continue earning that income with the proceeds from a rock-solid, guaranteed investment, the fact is you’ll need a lot of dough. The five-year GIC rate is currently around 3%, so $100,000 a year will require you to invest $3,333,333 of capital. Of course, few investors put all their eggs into the GIC basket, and many can count on some higher returns from variable assets such as stocks and real estate. But any way you slice it, it takes a lot of assets to replace a big income.

Today, though, there’s yet another variable added to retirement planning: many people are not retiring completely from their work. The equation has changed quite a bit from its historical model. Stopping all work made a lot of sense a hundred years ago, when people may have toiled for 12-hour days of back-breaking labour. You downed tools with relief at 65 because, like an old tractor, you’d ploughed your last furrow.

Even today, we still tend to think of retirement as dropping all sources of income and living only off our accumulated assets. There’s absolutely nothing wrong with this view, provided it’s what you want, and you can manage it. But we needn’t necessarily have our minds locked into that old paradigm.

Many of my “retired” clients have found that conventional retirement doesn’t work for them. Most often, they take a break, then return to some form of work—not necessarily because they have to, but because they find they enjoy their lives more with some kind of work to do. Many people work well into their eighties—even famous ones. Personally, I think Clint Eastwood makes better movies today, and George Burns became funnier with each passing decade.

Even for us ordinary people, it’s time to rethink retirement. For one thing, the combination of longer lives, disappearing pension plans, and market meltdowns means that for many people, conventional retirement is a dream that can never be realized. But I’d like to put a positive spin on that, and suggest that the old concept is dying a natural death anyway.

Here’s my view: when it comes to financial planning, many baby boomers often ignore a huge retirement asset—their decades of work experience, plus all their valuable skills and relationships that enabled them to be big earners. The good news: this asset doesn’t have to be written off when you retire. You can, if you wish, continue to view your skills as an income-generating asset. If you have what it takes to earn a $100,000 income, that makes your skills worth some $3 million.

Such an “asset” is not to be treated lightly, and writing it down to zero is a really counterproductive idea. Sure, if the daily grind is wearing you down, by all means take some time off. But don’t put yourself out to pasture entirely. Consider a gradual transition to retirement—one that keeps your work skills alive, and keeps the paycheques coming, but that benefits your mental health rather than detracting from it. (It might be useful to think in terms of retiring from “the things you don’t like about work,” rather than retiring from work completely.)

Perhaps you could take a leave of absence, followed by a return to part-time work. Look at your retirement figures and consider: what would you have to do to earn just half your present income? The new equation involves all your savings and your existing assets—including your professional skills. They just might be the cornerstones of the “new retirement.”

To help people put their finances into this new framework, we’re offering a series of seminars that focus on retirement and other late-life issues. The next, a lunchtime session, is entitled “Cash Controls For Busy Boomers,” and will be held at noon on August 5. Lunch will be served. The session is free, but space is limited—so please reserve your spot: call Kathy Brunelle at 613-788-8010, or e-mail her at kathy.brunelle@RichardsonGMP.com.

Alan MacDonald is an Investment Advisor with Richardson Partners Financial Limited. Alan helps investors with over $500,000 of assets make smart decisions about money. For more information please visit www.alanmacdonald.ca or email Alan at Alan.Macdonald@RichardsonGMP.com.