I read an interesting article in one of the financial planning trade rags the other day entitled, “Advisors Need to Talk About If, Not When, to Retire.” So that’s what I’m going to do!
In one of the greatest movies of all time, The Shawshank Redemption, Morgan Freeman exhorted Tim Robbins to, “Get busy livin’ or get busy dyin’.” For many, the whole concept of planning for retirement seems like an exercise in the latter. And that just ain’t so.
After 13 years of talking with middle-aged folks about planning for retirement, the one thing I found to be almost universally true is that virtually no one has the stereotypical retirement in mind. I’ve yet to have one person who wants to move to Florida, buy white polyester pants, yell at kids walking on their lawn and b**ch about the government. It’s a graphic image, to be sure, but it just doesn’t fit most folks.
The danger in this scenario comes when the inability to envision retirement leads to a lack of planning for getting old—a condition which seems to affect us all. Here is an idea that might help you get over that hump (not mortality, but retirement planning): think about retirement not as a place to hang out before you meet your maker, but as a place when income security gives you full flexibility to do whatever it is that you want to do!
If you’re in your 40s and 50s you are likely in your prime earning period of life. It may well be that you no longer even enjoy what you’re doing, or at least you’re liking it less than in years past, but you’ve gotten to a point where changing jobs would be financially ruinous for you and your family.
I have a very successful client who works in public relations. This client has been spectacularly successful by any reasonable financial metric and cannot conceive of leaving his current status—at least not until he reaches his definition of income security.
How do I define the phrase income security? At its base level, it means the ability to do whatever you want without being concerned about the financial cost or benefit. Teach school, volunteer, dig ditches—whatever your version of a fulfilling, enriching life, is, income security allows you to do just that.
Here’s the other version of “retirement” that most 40- and 50-year olds can envision: let’s say you like what you do, you just want to do less of it. Perfect! Income security may mean that rather than working 50 or 60 hours a week, you work 10 or 20 hours a week continuing to do what you love. The American Psychological Association shows that those who work past traditional retirement age suffer 17% fewer major diseases and less physical decline than those who retire “on time.”
So get your kids through college, pay off major debt, create the nest egg that you and your advisor have deemed appropriate to maintain the lifestyle you want in retirement…and then don’t retire! Or do. Getting to the point where you can confidently say, “I can do whatever the hell I want” may be the ultimate financial goal.
What steps are you taking to get to that place? A different way of thinking about retirement may help you get over that hump…and help you to get busy livin’!