As a financial adviser I spend a lot of time speaking with clients about their retirement plans – when they want to retire, how much they want to live on in retirement, what capital base they need to meet their goals, etc. But there is an aspect of retirement that is almost more important than all of this and yet it is often ignored.
You see, for many people, their job is part of their identity. It forms part of who they are and gives them purpose in life. If you take that away from someone cold turkey, then that can lead to a whole world of new problems which aren’t money related.
So today I want to talk a little bit about the emotional aspect of retiring and explain to you my own personal non-retirement plan.
When speaking with clients about retirement I often try to reframe the conversation. Instead of asking people when they want to retire, rather I ask “by what age do you intend to make work a choice and not an obligation?”. This is a much more empowering conversation.
Many people see work as a means to get money and not much else. But really, work is so much more than that. It is a chance for us to communicate with others, make friends, speacialise in our craft, show off our skills and a chance for us to feel needed. After all, if you weren’t needed then you wouldn’t be paid to be there!
When we stop working, we lose that purpose. We lose part of our identity and, for some, the reason we get out of bed in the morning. If we don’t replace that purpose with something else, our world can become very small.
Work forces us out of our comfort zone both mentally and physically and if that disappears then all of a sudden small, non-relevant issues in life can become your primary focus. Instead of looking forward to a well-deserved rest on the weekend we look forward to a double episode of Home and Away. Instead of getting up early, facing peak hour traffic to get to where we need to be we sleep in and dread the thought of commuting the freeway.
So in short, work offers us more than just a monetary incentive. It offers us a purpose.
Now I am not saying we should all work forever because that’s the only way to be happy. Some people have really crappy jobs and I can understand why they would want to get out of there ASAP! What I am saying is that, as you head into retirement have a plan in-place to give your life fulfillment.
People with hobbies and great social lives are generally very good at doing this. They can occupy their time meaningfully. But other people need to teach themselves this new world.
Either way, whether you love your job or hate your job, the trick financially is to be in a position to make work a choice and not an obligation. This means you have enough money to support your desired standard of living without the need to earn more. Once you achieve this level of assets, the world is your oyster.
If you love your job then you can continue doing what your doing, on your own terms. If you hate your job, you can try your hand at something new. Get involved with social clubs, volunteer for a good cause or take up an employed role in something you are more passionate about. All of these doors open when you have your own financial backing.
Personally, I love what I do for work and I can’t see that changing. Now I might be a bit young to make this call but I can’t see myself retiring…ever. The day I will stop working is probably the day I lose my marbles and will be forced to stop.
Having said that, I do anticipate that my role will change over the years. I am sure I will wind back, look after less clients or maybe take on more of a mentoring role. The point at which I do this is the point at which I no longer need the income my business generates to support my desired standard of living.
At this stage, I haven’t put a set date on when I want to achieve financial freedom but I do know that my trajectory is looking promising. I am building different buckets of assets, I am reducing debt aggressively and my business income continues to grow. So although I don’t have a set date in mind, I can tell you that it will be well before I am 50.
But the thought of retiring from the workforce, just doesn’t appeal to me. I enjoy what I do and I want to keep doing it for as long as I can. Although I am only 32 so maybe check-in with me in 10 years’ time and see if my opinion has changed!