Why Retirement Needs a Rethink
A few months back, I had an introductory meeting with a married couple who were hoping to retire within the next year or two. The wife made note that she was ready to retire a decade ago. Her job at a large corporation, which once had been glamorous, had been reduced to a glorified call service, where her every word was scripted and her every minute tracked. She was frustrated and burnt-out.
Their plan was for her to work until she could take social security at age 62. At that point, which would have been about a year from our meeting, their house would be fully paid off, and they felt they could handle the reduction in income. She desperately wanted me to tell her she could retire immediately. Though they didn’t have a great deal of financial flexibility, I was able to present one alternative that would allow her to retire as soon as she like (which inevitability involved some compromises). However, the husband was attached to the original plan and they decided to stick with that.
I think of them often, and find myself wondering how long had she been aching to retire? Had she felt this tired and burnt out since she was 55? 50? Earlier? What kept her going? A sense of loyalty? A pre-determined retirement date? Some fictitious number sold by a financial firm? A belief that she didn’t deserve more out of life?
Retirement Needs a Rethink
The idea of retirement needs to change. Like many good things, it has devolved into a product sold to the consumer. Just make it to the finish line, we are told. A heaven of golf, travel, and restful days awaits you.
But your work shouldn’t be a marathon for which you are ill-prepared. Trust me, I ran one of those, and the last 10 miles were hell. Yet still, the aches and pains subsided within the week. However, to look with resentment upon the last 10-20 years of your working life is not so easily recovered from.
In an era where we are living healthier for longer, we need to redefine retirement. Who does it benefit to continue the rat race until some predetermined retirement age? Certainly, not you. What about your life now? Are you fulfilled? If the answer is ‘no’, can you say you’ll be fulfilled when you’re not working anymore?
I wonder what would have happened in the case above, had the wife switched jobs at age 50 or 55 to something that enlivened her. Maybe she had always wanted to work at a non-profit serving women. Or maybe she loved the hustle and bustle of a local coffee shop and ended up managing it. She might have taken a pay cut, but she also might have also enjoyed her work so much that she wanted to work longer.
Now, instead of retiring at 62, weary and worn down, she was thriving and growing, and planning to work until 67 or maybe even 70. More, she wouldn’t have gone to bed every night dreading the next morning’s work, nor would she wake up aching for the weekend.
Of course, they may have had to make some budget adjustments due to a lower income, but the 5-8 additional years of employment income changes their retirement income needs. Their savings can grow with the market for a longer period before being needed for living expenses, and her social security payments are higher at full retirement age than the discounted amount she will take at age 62. (It’s even higher if she delays until age 70).
In this hypothetical scenario, making a little less for a little longer, while dramatically increasing daily personal fulfillment, is a total win. instead of hoping for retirement to save her, she saves herself. Now that’s financial freedom.
Let’s Say You Retire, Now What?
Many make it to retirement only to find that the promised land isn’t all that they thought it would be. Boredom is common, and so is depression. How do you fill all these hours? What do you do with yourself? How do you ensure that your days feel meaningful to you?
Many individuals don’t start asking themselves these questions until they are already retired. However, by that time it is often too late. In our financial life planning consults, we start with conversations about meaning, fulfillment and values and build a financial plan that sprouts out from the core of an individual. Unfortunately, this is rarity in the industry, and many of us have been taught that meaning will come after the financial part gets fulfilled. That is why we pin our hopes on retirement. If nothing else, THIS will make us happy.
I'm going to let you in on the financial services industry’s dirty little secret: if you aren’t happy now, don’t expect it to change in retirement.
Retirement, unfortunately, isn’t an answer. For many, it just fills them with more questions, many of which were overlooked during days filled with the demands of employment.
It's About You and What You Find Most Fulfilling
Though I have focused on negatives above, many individuals are quite content if not incredibly happy in their work. It offers them a place where their skills are valued and their expertise and experience relied upon. Work can also provide a deep social network. How will you fill this gap in retirement? No meetings, no social outings with esteemed colleagues, nothing to report on and no one to report to.
This time, I don’t mean to come down on retirement. It’s a time that can be incredibly fulfilling, but like all things, it must be entered with a sense of purpose and awareness. Unfortunately, many individuals and couples haven’t stopped to ask themselves the ‘why’ questions. ‘Why retire?’ ‘Why work this job?’ ‘Why not do something else?’
If it’s difficult to find a suitable answer to ‘why retire?’ maybe consider staying onboard for another year or two. Or, maybe you could go to part-time or even hire yourself out as a consultant.
One of our clients was ‘offered’ early retirement by a large tech company (another word for mass layoffs). Instead of stewing in resentment, she recently launched a ‘green’ business that has great potential and she is filled with passion and purpose. Another client is in her early 60’s and her latest reiteration is as a life coach. She has a fulfilling and growing practice and is planning multiple seminars over the next year to serve even more people.
These women found what fills them with purpose and built their service around it. What fills you with purpose? What’s your ‘why’?
Don’t get me wrong. I aspire to take years off from employment, though I prefer the idea of multiple long sabbaticals to one long retirement. That said, of all my jobs, I love to write above else, and I hope to do that until my last.
Positive Framing vs. 'Retiring'
Many of us often get stuck in a rut of recurring thoughts regarding what we don’t want to be doing with our lives.
I DON’T want to work this job anymore. I DON’T want to work for my boss another day. I DON’T want to feel stuck in this city for another year.
Unfortunately, this cycle of negative thinking rarely gets us anywhere. Worse, this is how many individuals retire. The decision is not a ‘yes’ to future possibilities and aspirations, it’s a ’no’ to their current paradigm.
This functional ’no’ is built into the very word ‘retire.’ We retire from an activity with nothing stated about what is to come next. It’s for this reason that the conversation has devolved into marketing plans and stereotypes. For this reason, maybe we should retire the word ‘retire.’ Here’s several potential substitutes:
- Purposeful Transition
- New Beginning
- Next Metamorphosis
- Positive Transformation
- A Shift to More Meaningful Activities
Maybe one of these speaks to you; maybe you can come up with something else that sits even better. Regardless, the point is that instead of retiring away from an activity, we should be transitioning with purpose into an activity or lifestyle that is calling to us.
That might be as simple as, I want to spend regular time with my grandkids during the week.
Beautiful. I love it.
It may also be something to the tune of, I want to volunteer my time and skills to a cause I believe in.
Incredible. Keep going.
Whatever it may be - travel, live in a new city, write, paint, enter a new industry, work at a startup, start a new business, become a life coach, etc. - ‘it’ (i.e. your purpose) becomes the ‘why’ of your transition. You’re not moving away from anything, you’re breathing into possibility and purpose. Transitioning away from your current job or employer is just one of the necessary steps to help you reach that higher plane.
In David Foster Wallace’s famous graduation speech, “This is Water”, an older fish asks two young fish how the water is. One of the young fish turns to the other, and asks “What the heck is water?”
The young fish, as it turns out, don’t even know what they are swimming in. So it is with our antiquated ideas on retirement. We don’t even know what we want it for. All we know, is what we don’t want. Or worse, we are just following social norms: Retirement, I guess, is just something you do when you are my age.
Regarding the married couple with whose story I started this post, I wish I had met them when they were 50; or better, younger. We could have defined a purpose for them and found a way to use their financial resources to support that purpose. Luckily, their story is far from over, and I hope they take the time to do so now.
Retirement needs a rethink. And it starts with me and it starts with you.
What’s your purpose? What do you value? What do you need to live a fulfilling life?
Here are some questions to get you started:
- If you had more time or more money, what would you do?
- What would a fulfilling day look like? How about a fulfilling year?
- What tasks and jobs do you lose yourself in because you enjoy them so much?
- If you could have been or done anything else for the last 10-20 years, what would that have been?
- How would you like to be remembered by those who know and love you?