In the Personal Finance world, the issue of retirement is often either:
- Neglected altogether; or
- Worshiped at the altar
I guess if you had to choose one, you’d usually end up better off worshiping than neglecting. But are these really our only two options? After all, who exactly made “Retirement” such an integral part of the American Dream?
I’ve been really contemplating these questions for the past couple of months and would love to get your feedback. Here are some of my reoccurring thoughts on the issue:
The Original Need For Retirement
First, it would do a lot of good to get familiar with the original purpose of the modern concept of retirement. Our society’s fetish with retirement is still a relatively new concept. It wasn’t that many years ago that the New Deal spawned a series of ideas that would quickly mold our modern view of retirement.
You see, during those intense times it was becoming increasingly necessary for our government to find a way to encourage an aging generation to make room for the new horde of young, frisky, and most importantly, unemployed generation. It was a very tough time in our history and the public was demanding drastic action. The forces-that-be decided that the fastest way to implement the much debated Social Security Act was to have it paid from payroll taxes. In other words, the “retirement” of this generation would be paid for by the workers of the current generation.
Starting after the Second World War, our society started to push the concept of retirement even more and more. Suddenly, making it to 65 and retiring was our ultimate goal. Work diligently, pay your dues, and you’ll be able to retire with a little dignity. To be honest, this sort of system does have its benefits. If wages continue to increase, housing pricing continue to climb steadily, and population continues to explode, everything else just falls perfectly into place. For over 50 years, we’ve been able to hold the pieces of the puzzle firmly together. In more recent years though, the holes in the systems are starting to show.
Do We Still NEED Retirement?
Times have changed.
You no longer need strong back and able body to excel in the workplace. Being bigger, stronger, and faster only has advantages for a very small percentage of the population who are professional athletes. The evolution of both the computer and the internet have ushered in our current information age. The nature of business no longer favors someone just because they are young and more energetic. Business now rewards those who possess both the ability to rapidly obtain and interpret information, as well as the ability to comfortably adapt and evolve.
In addition, the life expectancy is no longer 63 years old, as it was when retirement age was set conveniently at 65. It risen over a decade and a half to just over 78 years!
It’s completely reasonable to work efficiently and effectively well past even 78 years old. The often cited and well-known story of Colonel Sanders was that he never even fried a chicken until age 40. Even then, the first KFC wasn’t franchised until he was 65. Whether you like Kentucky Fried Chicken (or Kentucky Grilled Chicken, whatever) or not, his story is a powerful testimony against retiring too early.
Sanders was one of a minority that went against the retirement curve of his time. Admittedly, part of his ingenuity came out necessity. Nevertheless, we can learn from his persistence towards seeing your passions through to fruition, regardless of age.
As the nature of our business continues to evolve and the expectancy of our lives continue to lengthen, it’s becoming more and more clear that our initial needs for “retirement” are becoming obsolete. But putting these tangible needs aside reveals an even bigger and more important question…
Should We Even WANT To Retire?
My biggest beef with our society’s current model of retirement is the underlying assumption that leisure is more fulfilling than work. After all, for over half a century we’ve been focused on working like slaves in order to be able to “retire” someday. This fiction concept of retirement was that all of our worries and problems would magically dissolve as we played shuffleboard, bridge, and met each other for Sunday brunches. Obviously, this is never the case.
Don’t get me wrong. Many retirees choose to spend more time with their growing families, start traveling, and even volunteer time to worthy causes and organizations. That’s all powerful stuff. However, all to often in reality we sacrifice family time, delay traveling, and ignore worthwhile pursuits upfront in order to pack them all together starting at age 65.
Do we really have to follow this sacrifice-and-cram mentality? Can we shift our “shoot for 65” mentality to one that focus on aiming for lifelong fulfillment? In this day and age, we hardly have any remaining excuse for not initiating the alignment our passion, our work, and our purpose. These no longer have to be independently moving parts in our life.
If you are willing to buck social pressure and regain control over your financial life, you can unlock many more doors to following your passions. Instead of sacrificing the things we discussed above, Courtney and I have made the decision to sacrifice the nice car, the starter home, and constant debt payments. We’ve pledged to simplify our lives as much as possible in order to capitalized on the increased opportunities to truly follow our passions.
Is this the magic solution to happiness? I doubt it. But I certainly think it’s an upgrade from the outdated model we’ve come to know so well. Chances are your life and your circumstances are drastically different. Regardless, we both know everyone has the opportunity to spend time getting in touch with their true passions and purpose now. There is no reason to wait.
All things considered, here’s my challenge for you:
- Stop obsessing over retirement calculators, dreaming about life decades down the road.
- Start devoting that time/energy to becoming intimate with your passions and purpose.
- Stop viewing your working life as a separate and negative force that is only conquered by “retirement”.
- Start taking steps today that foster the alignment of your work, your passions, and your purpose.
Updated for 2015. Take control of your retirement and build more wealth today!