Before we dive deeper, let’s further discuss the typical retirement:
The Current Retirement Landscape
Many components contribute to the current retirement landscape. Touching on all of them would be a college thesis, so we’ll explore a couple. First, let’s establish what we mean by the current retirement landscape. We’re not referring to the landscape of retirement financial readiness. What we’re talking about is what the traditional retirement life looks like to most. Many seem to be striving for the picture that is painted on most brochures and websites for financial planning firms. You know, the couple in their 60s, strolling the beach, one of them is wearing a sun hat – finally, it’s their time. Or, the couple playing golf with another couple in Florida. New friends, time to socialize; finally, it’s their time. Usually, there are a couple snapshots of grandchildren. By most pre-retirees of today’s America, this is the desired life. And it’s a noble one. People work hard, they sacrifice a lot, and it’s their time to enjoy life. The Golden Years.
Let’s talk about that landscape. What created the desire and the ability to stop working? This is an oversimplified hypothesis, but there are merits of truth. As for the desire, up until this point, work has primarily been a means to an end. That is, a method to save money so that you don’t have to work ever again – work is not something you enjoy. So, why wouldn’t you strive to stop? As for the ability to stop working – that is, having the financial means to do so, we have retirement savings (401k, IRAs, pensions, etc) and Social Security. Both propose intellectual quandaries – lack of desire to work and the ability to stop.
First, are we meant to stop working, and should we desire to stop? There’s a convenient case to be made from our hunting and gathering days. You didn’t stop hunting food until you physically couldn’t any longer. At which point, you’d likely do something less labor intensive – say build a fire – and barter (i.e. if you share your food, you can cook on my fire). There wasn’t much retirement going on. Perhaps humanity has moved up Maslow's Hierarchy of Needs (especially in developed countries) and our concerns aren’t physiological anymore. We have food and drink. Okay, but does that excuse us from continuing to work? For many, our basic needs are met at birth, which allows us to focus more time and energy on things like our quality of life and relationships. After a decade or more in the workforce, there is an option to stop working, assuming we’ve acquired the financial independence to do so. But, is that best? Let’s ask the older hunter and gatherer who can no longer move like he used to and is now building fires. Presumably, this elder is also providing his wisdom from experience to help others endure difficult times. What happens if the landscape changes – literally and figuratively? Maybe a 100-year storm changes the conditions of gathering food and the elder can no longer relate to his offspring’s challenges. Does this sadden him? This is a simple comparison, but even though our needs are a totally different set of needs now, is leaving the workforce the best course of action for an individual’s health and society’s well being?
Here’s a prickly topic. Why do we (the Mass Affluent) have the ability to stop working? The Social Security Act of 1935 provided benefits at a full retirement age of 65. The life expectancy of Americans in 1935 was 61 years of age - The Social Security Dilemma. Simply, beneficiaries received payments for a much shorter period of time – if they received them at all – compared to now. To be clear, this is not the beginning of a plea to drastically change the Social Security system. In fact, we’re pretty “bullish” on the system for a variety of reasons not particularly relevant to this blog post. However, there is a notable observation that the drastic difference between how the system was used at creation compared to now should be considered in how we’re now able to stop working. For decades, the system has enabled us to strive for retirement, continually enhancing what that vision of retirement looks like, and even build a huge industry around it. People get paid to help people to stop working.
Time to Rewire
We contend that working Americans start to consider the concept of ‘rewiring’ vs. retiring.
We believe that now is the time to enjoy our work more and commit to lifelong learning. Consider your hobbies and passions— how can you utilize those to create an income? You’ve saved and invested the entirety of your working life, you have options available to you that could provide a passive income. We encourage you to be open to pivoting and doing something very different than you did before entering the workforce. More specifically, it is the time to get and stay educated, be willing to learn about different ways to make a living, and to be open to contributing to society for longer than the traditional retirement age. This country needs more mentors, wisdom at work, and yes, taxpayers. This makes for better equipped young people (those open to learning), and happier baby boomers as they continue to make an impact on the world’s progress.
‘Rewirement’ offers sustainability to working longer term – people willingly work longer if they enjoy themselves. This is not to say, ‘rewire’ means work forever. Rewiring could absolutely mean to scale back or slow down significantly. We’d invite people to even begin using different words to reframe their mindset. Instead of work, you could be contributing, servicing, adding value, mentoring, or if you’re lucky, executing your passion. Yes, you can get paid for all of these. Financial Independence Advisors actively seeks out younger people interested in a pivot from their primary education or first career and seasoned financial advisors who are willing to offer us their mentorship. To be sure, the exploration of this mentality shift isn’t just about our happiness. We’d also have a tax paying workforce that contributes to Social Security – perhaps even simultaneously as they receive benefits. This compared to retirements being largely subsidized for 30 years of a person’s life is surely a better recipe for the SSA.
Rewiring gives working people permission to enjoy what they do for work, willingly work for a longer time, and reap the benefits in the form of compensation and happiness. People who rewire will be more likely to get paid for something that interests them, they may find themselves in a fulfilling mentor role, and/or they will live in less fear of running out of money. Financial Independence Advisors is passionate about assisting our clients with their ‘rewirement’ plan. If you think you’re ready to prepare for rewirement, please don’t hesitate to schedule a free consultation meeting.
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