A Better Way to Define Retirement
Imagine for a moment that you have your first grandchild sitting on your lap, and you’re telling stories about when you were younger … when suddenly, out of the blue, your grandchild asks, “what’s retirement?”
After you get over the shock of hearing this question from your grandchild, and wondering where he or she ever came up with “that one,” stop and think about how you would answer that question.
This is a big issue because how you define retirement is a major factor in how you will live the rest of your life.
Society’s Definition = ROADBLOCK
For years, society has defined retirement as that time in your life when you stop working … when you get to enjoy the fruits of your lifetime of work.
For some people I met with over the last 35 years, that definition is perfect.
For many others, however, that definition is a big ROADBLOCK!
One of the reasons is they’re just not ready to stop working. They’ve done it for so long, and it has become so much a part of who they are that the thought of not working scares them a little.
What I’ve discovered while studying and working hands-on with so many individuals and couples as they navigate their retirement transition is their goal is not necessarily to stop working.
They just want to know that they can afford to if they want to, and there’s a big difference. Knowing that you don’t “have” to work changes everything, and it’s the “catbird seat” many desire.
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A Better Definition of Retirement for You
A better definition that you can tell your grandchild is that retirement is spending all of your time doing exactly:
- what you want
- when you want
- where you want
- with whomever you choose
And, most importantly, all without financial anxiety or guilt, i.e. with no dependence on a paycheck from work to support yourself and no guilt for experiencing the ideal life that you’ve earned and prepared for.
If that includes working, great! There is nothing wrong with that. In fact, I encourage it as long as you’re not working and engaging in activities you don’t like because you think you “have” to.
That’s retirement!
Financial Confidence
But there’s another problem! One of the biggest challenges I’ve witnessed many individuals experience over the last 35 years is transitioning from working, receiving a paycheck, and saving money, to no longer receiving that paycheck.
To make matters even more difficult, you then have to begin spending the money you’ve taken your entire life to save!
If you’ve developed the habit of carefully saving money during your working years, flipping the switch and spending it doesn’t feel normal.
It feels strange, almost like an irresponsible betrayal of years of disciplined positive habits.
Unfortunately, all those years of discipline and saving, of building up money and investing it, are of no value to you when you transition to retirement if you don’t have the financial confidence to spend it.
This financial confidence is not something we’re born with. It’s a “muscle” that needs to be developed by implementing essential strategies, mindsets, and a comprehensive plan that meticulously answers three key questions:
- Do we have enough savings built up to stop working (if we choose to)?
- How much can we afford to spend without the anxiety of running out of money?
- How should we position our hard-earned savings to make it last?
Once you have definitive answers to these questions and a plan and strategy to guide your educated decision making, whether you choose to remain in your current field, migrate to a new pursuit, or start exploring more leisurely interests, you can feel prepared and confident making your decisions. And you will be an inspiration and a terrific role model for your grandkids!
This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation.
Jack Phelps
Financial Advisor / Managing Director