Why Right Now Is the Time to Start Planning for Retirement
Retirement marks significant life change. For generations, the expectation for turning the page to this chapter of life has been this: after working nine-to-five until your mid-60’s, you stop and spend the next 8 to 10 years winding down. This trajectory accounts for a lifespan of about 72 years and one career-long, full-time job. A few decades ago, that trajectory made sense, mathematically. Life expectancy was about 72, and people tended to hold the same job and contribute to the same pension for their whole career. But now, we are living longer. We are working differently. The way we retire must change, too.
Life expectancy today is 78 and, on the whole, it is still increasing. But here’s the thing – life expectancy is defined as the age at which 50% of people are no longer living. What that also means is that 50% of people that age are still living. Many will live for much longer. Within the traditional model of retirement, this would require people to retire for longer, or more realistically, work for longer. But what if that didn’t have to be your reality?
What is retirement, really?
Let’s begin by defining the term. Retirement is the point at which you begin drawing from your savings – in any amount. To this point, society has thought about retirement in black-and-white. You are working, and not retired, or you are retired, and not working. An either-or scenario. You reach retirement age, and you retire. But notice this: the definition of retirement is not all-or-nothing and it is not tied to age. It is simply the point at which you turn the page, and start living your day-to-day differently.
The next question is always a question of timing: when can I retire? The answer seems somewhat obvious, but it is profound if you use it to your advantage. Your total income is the sum of your earnings and the earnings of your investments. When you have grown your investments to the point that it is substantial enough to support the life you want when combined with the money you actually earn, you can shift to a lifestyle you actually control, intentionally.
Retirement is not a cliff, it’s a slope.
When you start to see retirement as the day you begin drawing from that fund, even incrementally, doors of possibility begin to open. You can quit working as a means of fully supporting your life. If that means you quit working, then you quit working. If that means you work differently, that is okay, too.
It is a simple idea. It is all about asking the right questions. It’s not just if and when you can retire. Knowing that you have the power to live out your next chapter intentionally is liberating. It can also be overwhelming or scary. We can help guide you; help you find the right questions to ask.
So, what are the right questions?
We help you go beyond the if and when to ask – what do I want retirement to look like? The way you have lived your life is unique. Your standard of living is not identical to your friends, your family, or your colleagues. Shouldn’t you expect the same in retirement?
We start by defining your needs – not what you’ve been told you need, or what you’ve always had. But what do you really need? This may look like a new lifestyle, a downsizing, a part-time gig at the wildlife sanctuary you’ve always loved. From there, we ask, what do you want? What would getting there look like? The sooner you begin, the more power you will have to define this chapter.
In the next few weeks I am going to share a few of our client’s unique stories on their road to retirement. We are here for you if you want to talk!