Retirement Redefined

For as long as I can remember myself working with clients on retirement planning, the word "retirement" has been banned!! Yes, clearly banned from the conversation. It was always replaced with phrases such as "second career", "dream job", "favorite pass time" but never retirement. You may wonder why I am so adamant about this. Well allow me to explain.

In previous generations, many moons ago, people worked until they died or they were no longer productive to the tribe or society. They were then taken care of by the tribe or community until their last days on earth. When life expectancy was in the 50's or 60's, taking care of an elderly parent or relative, was something that was simply done out of respect as well as self-preservation for the community. These older citizens were referred to as the Elders as they carried with them priceless knowledge and information they acquired over their life time and then freely shared it all with the younger generations. This mutual respect and appreciation was beneficial for all members of the community. With the rise of cities, industry and the changing demographics around the modern world, workers’ rights and basic living standards were aspired to by all those working within this new industrialized system. Over the years the concept of retirement turned into an ideal situation where by one would work for a number of decades and would then by supported by their employer of the previous decades until their eventual demise. The concept became a very expensive one for the employers as life expectancy rose with medical advances and now supporting a former employee on pension, became a financial burden that business chose not to take on. With social security and pensions once being the staple for a solid retirement now coming under fire from all directions as unsustainable, retirement needs to be redefined.

I don't want to get into the whole political conversation which we are not having on whether social security needs to be eliminated, changed or revamped. I don't want to focus on what the government or business needs to do or not do, but rather on what you the individual has to do right now. Retirement just a few decades ago meant to most people the ability to golf all day, sit by the pool and enjoy a work free day doing whatever you wanted to do anytime anywhere. As long as people could afford to do nothing that was the ideal most aspired to. Today, with a much longer life expectancy, wages that have not grown over the past 20 years and have not kept up with the rise in the cost of living not to mention the lack of savings in most households in America, doing nothing is no longer an option. The idea that you will pass the time doing whatever you like is one that I want to build on but from a different angle. Rather than see that as your state of being in retirement, view this next stage of your life as the stage where you get to work at whatever it is you have always wanted to do but couldn't for some reason.

One of my dearest clients, my Mom, "retired" from real estate and started her second career at a major retail store in the custom jewelry department - she said going to work felt "like being a kid in a candy store", Another self-employed gentleman, my Dad, sold his stores and decided to stay occupied by working at an appliance store for no reason other than he wanted to stay active and be around people. He ended up working there for 18 years and was one of the top 5 producing salesmen each year. The point is DO NOT PLAN ON JUST SITTING AROUND, but rather get involved in something that will have you going out and doing something productive within your community.

Your life learned lessons are priceless and should not be taken with you to the grave but rather passed onto the next generation. Imagine the energy we can unleash in this aging nation when we combine the energy and vision of the youth we have with the wisdom learned by our elders. The possibilities are endless. When you consider that today we have a global market where nations are leaping into the present with citizens clamoring to attain and participate in the twenty-first century via technology and goods and services unimagined just a few decades ago, the markets available to us all are limitless. Don't think of yourself as someone who is washed up with nothing to offer the youth of today, but rather appreciate you as someone who can be a valuable asset to the community around you.

Yes, you will need to sit down today and make sure you are living within your means today, saving from your positive cash flow and holding your debt to the bare minimum. Make sure you have a diversified portfolio not just in your investment account but in your overall life. What I mean is that you need to see that you own assets you can manage to hold such as a home to live in or an investment property for future appreciation and current income. You want to have cash on hand as well as stocks and bonds for the future. Living financially sound lives today will enable you to be able to make the changes in future years that will afford you the ability to do whatever you chose to do as a productive, active elder member of our society.