Rethinking Retirement

(The following is a guest post by Nick at Pretired.org – another site dedicated to the art of financial independence)

Over at my site, Pretired.org, we talk a lot about “Pretirement” as a new — or at least newly recognized — stage of life. We touch on all the same issues as Justin here at Root of Good and, like Justin, my goal is to get people to think differently about their lives.

One of the interesting things I’ve discovered since I began blogging was how much of a struggle it is for most people to grasp the concept. To be fair, America’s puritanical history doesn’t prepare us well for adopting this new mindset.

We’re steeped in the “Protestant work ethic”, we don’t get dessert until we eat our dinner and the grasshopper will starve this winter because he didn’t spend the winter preparing unlike the industrious ant. Keep your nose to the grindstone, young man, and someday you’ll get to “retire” and slow down America’s roadways in your very own RV! One of our political parties has even taken to insulting poor people by demanding they enjoy the “dignity of work” — while THEY live off their investments, of course.

Paradoxically, while Americans feel you should work an entire hard lifetime before getting your reward, we are also simultaneously some of the shortest-term thinkers on the planet. Drenched in easy credit and TV commercials, we can have nearly anything we want at very close to the exact moment we want to have it. Cars, electronics, toys, fancy food, you name it. With a swipe of a card, it can be yours.

Those of us on a different path are all very aware of those folks who haven’t learned to resist the siren call of “stuff” and have buried themselves in debt. It’s understandable given the culture in which we’ve been saturated. What we’re less able to understand is how very responsible, hard-working and well-paid Americans find themselves close to retirement with virtually nothing to show for all their decades of labor.

That’s why I began writing over at Pretired.org. I wanted to convince people that there is another life path available. If the goal is a long, happy life, then the strategy should be to reach financial independence as early in life as possible — even if you choose to keep working.

Because there’s another aspect of the American mindset that actually works for us: our concept of personal freedom. No, I’m not talking about your “freedom” to shoot your own nuts off with a firearm. I’m talking about the ability to live life the way you want. To spend each hour of each day living with intention. Are you doing what you really WANT to be doing right now?

For some what they WANT to be doing is work. Entrepreneurs, physicians, engineers, artists, farmers: these are some of the occupations we think of when we think about people who enjoy their work. But even some cubicle dwellers love what they do. They love the interactions with people and they like feeling as if they’ve contributed to something each day. While they probably wouldn’t keep heading into work each day if there wasn’t a paycheck attached, they’re happy at work and it’s something they want to keep doing.

Others, however, grit their teeth and suffer through each depressing day just to reach that next direct deposit. Years go by. Decades. Bodies become hunched and broken. Eventually they’ll find themselves used-up 50-somethings struggling to keep up with the latest technology and fearing the next layoff will include them. And there’s always some Millennial ready to do the same job for peanuts.

Which is why I hope Americans will begin rethinking retirement. The reason I use the word “pretirement” is that I want to open minds to the idea of a life stage in-between your working career and traditional retirement. The main difference being that “retirement” begins when you begin to draw a pension (ha ha!) or social security. Pretirement begins when you reach financial freedom. When your core bills are covered by your income from your investments, say around $2,000/month, you can declare yourself “pretired.” If you’re able to reach that stage in, say, your 40s, you can enjoy life for 20 years or more before giving yourself a raise when you decide to retire.

What will you do with all those years? Maybe you’ll focus on your kids. That’s what I’m doing right now, although I’ll need something to fill my time when he goes off to school. Like the aforementioned cubicle-dweller, you might want to keep working. But you won’t have to take any crap anymore. You’ll feel like you’re walking an inch above the ground as all the petty infighting and corporate politics seem smaller and smaller. You can finally be honest in meetings!

Or maybe a second career is in your future? What have you always dreamed of doing? Others will devote themselves to their communities, volunteering for a favorite organization.

The point is that it’s up to you. End the mindless spending, invest well and stay focused. Once you’re there, you’ll find it is so worth it.

Root of Good’s comments: Excellent article, Nick!  I feel like I could have written this myself, as it echoes my sentiments very closely.  “Freedom” is really what you are buying when you stick your hard earned money into a 401k or IRA.  Tiny shares of freedom.  Maybe you find yourself loving your job, or the concept of a job, but having a sizable investment portfolio makes you a little more bulletproof in your job.  

After accumulating a sufficiently sized nest egg, you can afford to take risks and speak your mind.  After all, the worst thing that can happen to you (losing your job) won’t impact your daily life one bit (other than creating a gaping hole in your Monday-Friday schedule that you’ll have to fill with something interesting).  

Another key point in Nick’s piece is living intentionally.  Life is of a finite length, and comes with an expiration date unknown to all until it has passed.  This can be a sad and depressing thought, but only if you fail to take action and live your life with intention.  You are the only one that can make positive changes to get you into a position you want to be in.  It could be a different job, a higher paying job, or a different career altogether.  

You may want to work forever because you enjoy your job.  That is okay too, but remember it should be an intentional choice, and not a “choice” forced upon you by decades of indecision and failure to get your finances in order.  

I wanted to thank Nick for writing this guest post.  If you like what he wrote, he’s just a click away at Pretired.org.