Dump preconceived notions on Retirement
What does "Retirement" even mean anymore? Probably not what you think.
Daniel, a young man in the US, read Figure out what your Rich and Regular is and sent me a message over WhatsApp saying, “Life is too short to retire”.
Which got me thinking: What really is Retirement?
It is a very loose concept, one that has evolved out of our corporate structure. It technically refers to the day you leave your job or hand over the reins of your business to the next in line, for whatever reason:
pushed off the demographic cliff (the company has decided that you pack off when you turn 58 or 62).
forced to resign (“made redundant” is such distasteful terminology).
voluntarily decide to opt out of a job and its accompanying lifestyle as you have accumulated sufficient funds (this is so cool!).
When I met
in 2019, during his visit to Mumbai, he challenged my views on retirement.“When does a housewife retire? When do you retire from being a parent? When do you retire from being the best person you can be? When do you retire from doing what you love?”
I asked him if he considered himself retired. His response: “I don’t know how to answer that. In some ways I have been retired for 20 years. In some ways I have only worked part time all my life. In some ways, I have worked 60-hour weeks all my life.”
I present you with just two perspectives to rethink the concept retirement.
Wrong Goal: Early Retirement
Correct Goal: Financial Independence
Financial independence does NOT automatically translate into retirement (in the sense of stopping all paid work). NOT at all.
You can be financially independent and still work. You may quit being a full-time employee and work as a consultant or opt for freelance projects. Alternatively, you may keep working full-time but no longer out of insecurity. What Financial independence does offer is the power to walk away – either from a toxic workforce or work that you don’t enjoy.
Financial independence is not just a figure on the excel sheet. It is not solely about having money to cover all your expenses. It is about psychological independence too. What is the corpus amount that will help you overcome your insecurity? What is the cash flow you desire that will make you feel taken care of? Arrive at your own magic number.
Wrong Question: At what age must I retire?
Correct Question: What are the emotional/ mental/ physical issues that are pushing me to consider “retirement?”
Retirement is not just physically distancing yourself from the workforce. There is the psychological and behavioural aspect too. Explore your desires from three perspectives: existential, financial and emotional.
What are you retiring from, and what you are entering into?
What sort of lifestyle do you plan to maintain?
How do you plan to spend your time?
What will your new routine look like?
Have you given thought to your new social role, expectations, challenges and responsibilities?
There is no universal definition for retirement. Because…
Retirement is NOT a number (your corpus).
Retirement is NOT an age (you could retire anytime).
Retirement is NOT a destination (it’s a brand new chapter in your life).
Retirement is NOT a one-time event (it’s the starting of a multi-phase journey).
You can’t just plan for retirement, you must plan through retirement.
Thanks Larissa. Retirement is a state of mind. Some of us look forward to it, some of us fear it. The latter of course is usually a result of financial and/or emotional insecurity. Questions that plague you - What do I do if I have no office to go to and an entire day before me for the next 20+ years? Who do I talk to all day? How do I occupy myself mentally & physically? These thoughts can play havoc with us. But as you say today, the very terms 'retirement' has a new spin to it and my generation needs to get with this new, healthier approach to 'retirement', and welcome this time as a good opportunity to do much more at one's own pace and circumstance.
You break it down very clearly Larissa, nice one.