It’s time to remove retirement from your vocabulary.
Why? After all, isn’t retirement the whole point of things? You spend your youth working hard and saving up money, all so that you can finally STOP. It seems a little unusual when we put it like that, doesn’t it?
That doesn’t even scratch the surface of the retirement problem when you consider the financial implications. Let’s assume you want to work until the typical retirement age of 65, and you start working at 20 years old. That’s 45 years of working and saving, and your savings is likely around 20% or less of your income. If you live to be 100, which is entirely possible today, that’s 35 years to live off 20% of your income over 45 years!
We’re not bringing this up to create fear or panic, yet to present solutions. Because there IS something you can do… and that’s overhauling what you consider your life will look like in your “retirement years.”
If you look up the dictionary definition of retirement, you’ll find variations of one thing: “to remove from service.” While this definition may be fine when applied to sports jerseys or machines, it feels wrong to apply it to people.
Studies have shown over and over again that people thrive when they feel like their life has a purpose. People feel good when they feel like they are of service–to someone or something. When we remove people from service, we remove them from feeling purposeful.
Retirement can often translate to both cognitive and physical decline because there’s truth to the adage “use it or lose it.” For many people, retirement looks like doing less to the point of boredom or even fatigue. While it’s not always the case, when it is the case, it exacts a heavy toll on retirees.
This doesn’t mean you have to always live life at the same pace or intensity. However, a larger implication is at play. Regardless of your phase in life, being of service in some shape or form gives your life meaning.
What Does it Mean to Be of Service?
One of the common definitions of service is “the action of helping or doing work for someone.” However, we also think that service can apply to work that you do toward a goal or mission, or any action that falls within your “Purpose.” Service, defined this way, is something you determine as it aligns with your own Blueprint, and no one else’s.
For example, service to one person may look like operating a business. It may not always make sense to work in the same capacity at 70 that you do at 30. However, many entrepreneurs WANT to work as long as possible because they love what they do. As your life changes, you may decide that you want to work fewer hours or hire a larger team. Or, you may decide that you’d rather support your business from an advisory standpoint. The point is that if you DO love your work, there’s almost always a way to remain involved or find new capacities in which to serve.
Sometimes, our interests and desires develop in new ways, and that’s okay, too. After all, the most sustainable career path is the one that excites you and brings you energy. If it doesn’t, then it may be time to do some “soul searching.”
There are even times when perhaps you do stop working, yet still want to remain in service. And the good news is that you can! Serving a purpose is still valid even if there’s no monetary exchange.
We’re not suggesting getting rid of retirement in order to keep people stuck. We’re actually recommending it because getting rid of the typical retirement paradigm frees people to live a purposeful life at the perfect pace for them individually. As you age, you may find new ways to serve your community or your family. This type of service is just as fulfilling and necessary.
The Financial “Conundrum” of Retirement
Another compelling reason to throw away the retirement paradigm? It doesn’t make financial sense! The way our country practices retirement currently has people living off of a retirement account for almost as long as they worked to save that money in the first place.
This means that retirees are living on a fraction of their working income, even though it’s likely they have the same expenses post-retirement as they did pre-retirement. Downsizing your lifestyle may help the money stretch farther, yet it’s undeniably stressful to wonder when your money will run out. This doesn’t even factor in inflation.
Retirement is Unaffordable
We’re not the only ones saying this, either. While many of the financial “talking heads” would have you believe that $1 million is plenty to retire on, this isn’t exactly true. For starters, many people are unable to save that, even with the help of a 401k (which isn’t the most efficient retirement savings tool). Compound that with the inflation rate, and $1 million may only be enough money for a decade of retirement costs or less, depending on your standard of living.
In a recent CNBC article, a Harvard-trained economist Laurence Kotlikoff shared that delaying retirement by even a few years would dramatically reduce the risk of running out of money. In fact, the longer you can delay retirement, the better off you are likely to be financially.
Laurance himself writes, “As for me, I just turned 71. Fortunately, I have tenure and can keep doing research, writing books and columns and teaching. My current plan is to die in the saddle. My work is just too rewarding — financially, intellectually and psychologically — to give it up.”
What FIRE Gets Wrong
You may have heard of the FIRE movement–-a group of people whose goal is to make $1 million or so, all so that they can retire around age 40. However, the truth of the matter is that people in the FIRE movement aren’t really retiring… they’re just shifting their careers to something more fulfilling.
Many FIRE advocates are entrepreneurs who are creating cash flow and residual income so that they can travel and do more while they’re young. Or, they’re quitting their office jobs to become social media influencers, who can often make a lot of money from their online presence. Others still are turning to freelance work to fund their lifestyle.
None of these actions constitute a typical “retirement,” yet they do set a great precedent for what’s possible when you think outside of the box! The unfortunate downside is that many people BELIEVE that the goal of the FIRE movement is to stop working entirely, without understanding that the proponents of FIRE are simply redefining what work means to them.
The bottom line is that what typical financial advice suggests–saving $1 million–isn’t as much money as you think it is. In this way, taking yourself out of service doesn’t just remove you from feeling purposeful, it can also leave you feeling financially unstable. And even the people who claim to be retiring early often aren’t retiring. They’re simply living more fulfilling lives while making money.
The Power of Intentional Living
While work can seem like “work,” there’s an opportunity here to see work as a blessing. Every job serves a purpose in this world and creates value for other people. It’s also an opportunity to continue learning, earning, and contributing to the world around you.
Work doesn’t have to be a “curse.” And if it does feel that way to you, it’s time to consider what you WANT to do. What ignites a fire in you? How do you want to spend your time? Find work, or create a space for yourself that feels like freedom. (Need help finding your Purpose? Check out my sister’s company: The Blueprint Process.)
Want help optimizing your savings? We’d be happy to help you save more efficiently, and with more certainty. You can connect with us here, or email your questions to us at firstname.lastname@example.org.