Rethinking Retirement

Relax. You can still retire. You just might have to redefine the word retirement a bit. Like maybe calling it "second career explorations" or "extended earning opportunities" or just plain "working."

All right, this might not be as easy as you'd hoped. The economic tsunami of the last year has greatly complicated the already tricky issue of retiring gracefully. If you're close to that age, you've got some scrambling to do—near retirees probably took the biggest beating of anyone in the stock market meltdown. But even if you've got a long way to go, now's the time to revise your plans.

As our stories make clear, the world is a changed place, and you should start by rethinking your assumptions about what retirement means. It may be a question not so much of lowering your expectations as of modifying them. Of course, this notion should come as no surprise to regular readers of U.S. News, where we've reported on retirement for many years because we know that it's such a crucial part of every family's financial life. For many people, the dream of a fat pension and a sedentary lifestyle went out long ago. Active retirement and second careers make sense not just for your finances but your health.

The current recession will accelerate that trend as it changes consumption patterns and maybe even the country's growth curve. Debt—you knew this—is now revealed as the evil we always suspected and an even bigger no-no if you have to live off a reduced income. Americans seem to have gotten the message that savings matter.

Investments matter, too, and we've got some ideas for gluing your shattered portfolio back together. It's not as bad as it seems—a year or so of savings will very likely get your 401(k) fattened back up. But I'm not going to kid you that structuring a retirement portfolio is easy. It takes homework, discipline, and careful thinking about the possibilities of macro forces such as inflation. You may want to get a lot better acquainted with those boring old bonds and some of the more flexible versions such as TIPS. All the people who told themselves they'd never have to worry about a financial meltdown can now start preparing for the next one.

One of our most popular rankings has become our Best Places to Retire feature, which allows you to look at a variety of factors in thousands of communities across the country and come up with towns that meet your needs. No surprise, cost has now become a key consideration, so we break out some of the most affordable places in this issue.

Tell me about your retirement plans and how they're holding up. What do you think would be an ideal retirement? How do you plan to get there? What do you think is the key to a sound financial plan? Drop me a note at editor@usnews.com. I suspect you won't be alone.