In life, we often have the option to do things the easy way or the hard way. We can choose between the wide and narrow roads. Paradoxically, choosing the easy way out often leads to a hard life while choosing the hard way often leads to an easy life.
Narrow, difficult decisions that require discipline and sacrifice usually pay off by leading us into a place where the road is wide and our options are plentiful. On the other hand, taking the wide, easy path often ends up funneling you down a narrower and narrower chute until all good options are gone and all that is left are painful consequences. In short:
Easy choices, hard life. Hard choices, easy life.
Nowhere is this more true than with our finances. We all stand at a fork in the road when making decisions on things like debt, saving, investing and giving. Path A is wide and well worn. Reach for that credit card. Try to keep up with the Joneses. Feed those desires. The other path, as Robert Frost might say, seems a bit grassy and in wont of wear. Live within your means. Give generously. Save for the future. Steward those resources wisely.
Perhaps not surprisingly, my advice on finances (and pretty much everything else) encourages you to take the road less traveled. Sure, doing so will be difficult and take discipline, but it will ultimately lead you to a place of peace, security and comfort.
Quick note: This past week I’ve been up in Sequim, Washington visiting family and enjoying the great outdoors. Today we meet up with some friends and drive south toward California where we’re going to be hiking and camping along a rugged section of coastline called The Lost Coast. Cell reception will be spotty, but I’ll try to post some pics and videos to our Facebook page and (newly created) Instagram page. Tune in if you want to see some beautiful scenery or are just interested to see if I get eaten by a bear. Now on to today’s post.
The traditional definition of retirement contains 4 key elements:
- Age (65+)
- Work status (not working)
- Money (you need millions)
- Idealized pursuits (take those millions and buy a vineyard)
Not surprisingly, I’m not a huge fan of that definition. Among other problems, it puts you on the deferred life plan. You push your dreams off until “Someday” rather than living life to the full now. Not only that, but it doesn’t give you much time. If you retire at 65 and stay healthy and active until 75 (a stretch for many) then you’ve got 10 years to do everything you’ve been putting off for the last 40. Ten years is not enough.
Seneca did a good job pointing out these shortcomings over 2,000 years ago:
You will hear many men saying: “After my fiftieth year I shall retire into leisure, my sixtieth year shall release me from public duties.” Are you not ashamed to reserve for yourself only the remnant of life? How late it is to begin to live just when we must cease to live!
A better definition
My definition takes a different approach and attempts to deal with the problems I mentioned earlier. It has evolved over the years and will likely continue to do so as I live, learn, test and refine. Here’s my 10 word definition of retirement:
A system for living that optimizes for freedom and fulfillment.
Let’s unpack that for a minute:
It’s a system… I mean two things by this. First, it’s a system in the sense that it’s a set of connected parts forming a complex whole. Retirement has a ton of moving parts that need to work together to produce the results that you want. Those parts include things like money, relationships, pursuits, Social Security, Medicare, health, housing and insurance to name a few. Those parts work together in a complex system. If the parts work, the system works. If one or more parts isn’t functioning properly, the system breaks down.
Second, retirement is a system in the sense that it involves a set of principles or procedures for doing something. Your retirement should involve actions that you do on a regular basis with a reasonable expectation that doing them will get you closer to the life you want. Read this for more.
For living… There are no qualifiers here. It’s not a system for living once you hit 65 or have a certain amount of money in the bank. It’s a system for living now. Today. Retirement is not a life stage that you automatically arrive at after a certain number of birthdays. It’s an iterative process that starts today and evolves as you proactively work to gain more control of your time and then use that time in very intentional ways. Read thisfor more.
That optimizes… Your system should be optimized to produce the results you want. Otherwise it’s a bad system. It should move you efficiently and effectively toward the life you want. Fortunately, optimization is a natural byproduct of the iterative process described earlier. Rather than waiting until “retirement age” to figure out what you really want out of life (and wasting some of your best remaining years in the process), you’re testing and refining now.
For freedom… You can have all the plans in the world, but if you don’t have the time and money to get your dreams off the drawing board, then what’s the point? So yes, money is an important ingredient to a successful retirement to the extent that you use it to buy your freedom. Just remember that your goal isn’t to have more money for money’s sake. Your goal is to have a better life. Ralph Waldo Emerson said it well: “The desire of gold is not for gold. It is for the means of freedom and benefit.”
And Fulfillment… Retirement is more than a math problem. Yes, you need money (as we just discussed), but don’t forget about meaning. Money will help you sleep at night but meaning will get you out of bed in the morning. You need both to have a fulfilling life doing the things you want with the people you love. So decide what you really want out of life and then get very intentional about making that vision a reality.
How about you? I’d love to hear how you define retirement. Feel free to share in the comments. Have a great weekend!
Retirees are Unretiring in record numbers. You read that right. After decades of work and anticipation, people are entering retirement only to reverse course and head back to work. The RAND corporation conducted a survey in 2017 and found that almost 40 percent of workers over age 65 had previously been retired. That’s a lot of people. What’s going on here? Why do so many retirees unretire and how can you avoid the same fate?
It’s not usually about money
First, let’s look at what is NOT driving the trend: It’s not usually about money. The research shows that most of the people returning to work did so not because they didn’t save enough or because they experienced some sort of financial shock, but for other reasons. What were those reasons?
It’s about choice…
The study found that for many people, returning to work was planned. For example, they quit their full-time job to go part-time or they quit a high-stress job to take something more low key. This likely explains why younger retirees return to work in much higher numbers. They retire early with every intention of re-engaging in the workforce under different circumstances.
It’s no secret that people are living longer, healthier lives. That, along with the fact that jobs are less manual than in years past, can open the door to longer careers. In other words, returning to work in your 60s and 70s is an opportunity that exists today that didn’t necessarily exist when most job opportunities consisted of things like mining coal and riveting together skyscrapers. The data reflect this. Those with less education and more manual jobs tend to unretire at lower rates than those with more education and less physical jobs. Still, choice and opportunity don’t entirely explain the trend.
…But also about disappointment and unmet expectations
If you retire and then return to work by choice or to take advantage of a great opportunity, that’s a win. You want to do it and you’re able to. Where unretiring is a problem is when you either have to because of the money or you decide to because you find retirement unfulfilling. Unfortunately, the latter group accounts for a large number of Unretirees. They have their finances in order, but retirement is less fulfilling than expected. This problem can often be traced back to poor planning. If you don’t do a good job figuring out what’s next, you’ll likely drift back to what’s familiar. How can you make your transition successful? Here are several thoughts and takeaways that I had, both from the Rand study and from my 20 plus years of working with retirees.
Takeaways and Applications
Answer the right question. The retirement question most people seem intent on answering is “How am I going to pay for it?” That’s an important question, but retirement is more than just a math problem. In my opinion, we spend too much time thinking about how to get there (math) and not enough time thinking about what we’re going to do once we arrive (meaning). If you focus solely on finances, you risk having a retirement that is cash rich and lifestyle poor. Not surprisingly, that can be unsatisfying and can cause you to miss work, if only because it added structure and purpose to your day. To avoid that fate, put some serious effort into defining what you want to do during retirement.
Don’t just subtract. If all you do is subtract things—work, obligations, commitments—you will create a void in your life. That void can open you to self-doubt, regret, lack of purpose and boredom. Nature abhors a vacuum. If you take something out, you need to replace it with something else. If you subtract your career, you need to add in other things that will provide purpose, challenge and social engagement.
Avoid the temptation to do nothing. The temptation to do nothing can feel pretty strong after years of drinking from the fire hose of daily life. Unfortunately, doing nothing is not a good strategy for long-term fulfillment. It can be rejuvenating for a while, but it will get boring.
Your goal should not be to do nothing. It should be to do what excites you. If you’re feeling spent and burnt out after 40 years of work, by all means take some time off and recharge your batteries. But after that, you need a plan that will keep you challenged and provide meaning and fulfillment.
Practice. Not surprisingly, the better you are at something, the more you tend to like it. How likely is it that you’ll be really good at retirement on Day 1? Not very likely, right? You’re going from something that you know how to do really well (i.e. your job) to something that feels awkward and unnatural (e.g. travel, hobbies, more time with family and friends). There is a learning curve that can be frustrating and intimidating. But the more you practice, the better you’ll get and the more you’ll enjoy it. Acknowledge ahead of time that it will likely feel a bit unnatural, but keep practicing until you improve. Ideally, you should start this practice before you even retire. Start early with whatever portion of your time you control and practice, practice, practice.
Become an intern. This summer I have a young man interning with me. He has an interest in the financial industry, but wants to get some exposure to it before jumping into a 30 year career. Working as an intern will give him a chance to learn about the financial field, gain some experience, develop skills, make connections and evaluate his interests and abilities in a hands-on way. Why not do something similar before you jump into a 30 year retirement? Chances are that you know some people who are already retired. Ask them if you can shadow them for a bit. Spend some time talking to them about the experience. What is going well? What took them by surprise. What advice can they give you?
Consider partial retirement. Remember that work is a totally acceptable option in retirement. Maybe you don’t want to work 60 hours per week, but that doesn’t necessarily mean that you don’t want to find some sort of meaningful work where you can use your skills, make a difference and have some social interaction. If that’s the case, consider partial retirement.
Consider mini-retirements. With traditional retirement, you defer the good stuff to that 20-30 year period at the end of life when you have more time and money. The idea of mini-retirements takes some of that 20-30 year period (say 5 years), breaks it up into 1-3 month chunks and spreads it out over your working years. A mini-retirement is longer than a vacation, but shorter than…well…retirement. As you might imagine, there are a number of benefits to taking these extended periods off. You have time to actually experience a place rather than just visiting the touristy spots. It allows you to enjoy some of the benefits of retirement while you’re still young and healthy. It rejuvenates you and can help you come back to work more engaged and more productive. For more on mini-retirements, read this, this and this.
Retire to something, not from something. All the previous points can be summarized by this: Retire to something, not from something. Retiring to escape a job is a recipe for misery and discontent. Retiring to pursue things that you are passionate about is a recipe for meaning and fulfillment.
A blogger I follow recently shared the following paragraph from the book The Rise of Superman: Decoding the Science of Ultimate Human Performance:
“Scientists who study human motivation have lately learned that after basic survival needs have been met, the combination of autonomy (the desire to direct your own life), mastery (the desire to learn, explore, and be creative), and purpose (the desire to matter, to contribute to the world) are our most powerful intrinsic drivers—the three things that motivate us most.”
In other words, once you have a roof over your head and food in the fridge, you want to take a step or two up Maslow’s Hierarchy and focus on things that bring happiness and fulfillment. Retirement is the ideal time to make that a reality. Financial independence means that the money is covered, so you’re free to pursue the things that bring meaning. Both are important. The money will help you sleep at night. The meaning will give you a reason to get out of bed in the morning. With that in mind, here are 3 simple rules for retirement that will help you find meaning and purpose.
Rule #1: Control your time. We all want to feel like we are in control of our life and directing its course. The good news is, no matter how old you are or how much money you have, you control part of our life right now. Congrats! You’re (sort of) retired! Maybe you control 10 percent. Maybe 50 percent. No matter the amount, make the most out of it. Be motivated, intentional, creative, thoughtful, curious, introspective, willing to take risks, healthy and active. Be disciplined with whatever time you control now because the more you do it, the better you’ll get at it. It’s tough to flip a switch at retirement and go from decades of deferring your dreams to really living. Be a good steward when you control 10-20 percent of your time and that will help you when financial independence allows you to control 80-90 percent.
Why is controlling your time so important? Because, to paraphrase Annie Dillard, how you spend your days is how you spend your life. If you spend your time doing the things that are important to you, then you’ll look back on life as time well spent. If not, you’ll have plenty of regrets. In fact, the number 1 regret of the dying, according to the aptly titled book The Top 5 Regrets of the Dying, is this: “I wish I’d had the courage to live a life true to myself, not the life others expected of me.”
We should learn from that. The author interviewed hundreds of people who are where we will one day be. They had lived their entire life. They got out of bed thousands of days in a row and with each new day they had the freedom and opportunity to do what they wanted. And yet, when they reached the end, their top regret was, “Man, did I make the wrong choice most days. I didn’t really live the kind of life I wanted. I didn’t do the things that were important to me.” So if you want a remarkable retirement, control your time. Know what you want out of life and take those plans very seriously.
Rule #2: Be a lifelong learner. We saw earlier that it’s human nature to want to learn, explore and be creative. Show me someone who loves to learn new things and I’ll show you someone who will most likely have an interesting, rewarding retirement. Why is that? Learning comes with a host of benefits. It keeps your mind sharp. It keeps you engaged with advances in society. It helps you to know yourself and discover new things. It gives you new people to interact with. It gives you something fun to do with your spouse or significant other. It provides personal satisfaction and a sense of accomplishment.
And when I talk about learning, I’m not talking about learning in the traditional, sometimes boring sense of the word (e.g. What year did the Spanish-American War start?), but in the fun, practical, interesting sense of the word (e.g. How do you scuba dive?). In other words, pursuing knowledge and experiences that enrich your life.
One of the great things about our world today is that self-learning (also known as Autodidactism) is easier than ever. Gone are the days when you need an expensive education or lengthy apprenticeship just to learn more about something that you find interesting. Now you can just sit down on your own time and access a plethora of resources, tools, apps, books, and videos on just about any topic that interests you. Take advantage of that. Be a lifelong learner.
Rule #3: Make a difference to someone or something. One of the most popular posts I’ve written at Intentional Retirement is 15 Practical Ways to Live a Purposeful Life. One of the most popular books in recent memory is The Purpose Driven Life. Neurologist, psychiatrist and holocaust survivor Viktor Frankl said that striving to find meaning in one’s life is the primary, most powerful motivating and driving force in humans.
In other words, we’re hard wired to want purpose and meaning. That need doesn’t somehow vanish when you enter retirement. If anything, it gets stronger. When I talk to clients that have been retired for a while, the desire to find purpose and to leave some sort of legacy that outlasts them is important.
Your bucket list doesn’t need to consist entirely of bungee jumping and exotic travel. As Shakespeare once said: “Leisure is a beautiful garment for a day, but a horrible choice for permanent attire.” Don’t get me wrong. You should absolutely do fun and interesting things. Splurge on yourself. Be a little selfish. Those things are great, but don’t forget to add items to your list like giving, serving and volunteering as well. Maybe that means doing something like my retired friend Dan who spent three months volunteering on Mercy Ships in the Congo. Maybe that’s building houses for Habitat for Humanity like my client Bill. Maybe it means volunteering in your church or running for town council. Whatever it is, be thinking of ways to use your time, treasure and talents during retirement that will have a positive impact on others and will bring meaning and purpose to you.
Retirement often involves making important decisions with incomplete information when the stakes are high. You won’t have everything figured out on Day 1. More likely, you’ll arrive at your ideal retirement through a process of trial and error. You’ll make mistakes. That’s unavoidable. The important thing is that you learn from them. How best to do that?
Ray Dalio is an investment legend on par with people like Warren Buffett. He owns Bridgewater, the largest hedge fund in the world. Ray has a saying:
Pain + Reflection = Progress
In other words, pain is a good instructor and a strong signal. According to Dalio, success is nice, but it just causes you to do more of the same. You don’t learn much from it. Pain, on the other hand, has a lot to teach you. Whenever you make a mistake about anything, you feel some sort of pain. There’s a message in that pain somewhere. It’s hard to see while you’re going through it, but if you reflect on it once it’s over, you’ll probably be able to see what that message is.
As you experiment with retirement, write down these pain points and think about them. What caused the pain? What should I learn from it? What would I do differently in the future? If you do that, you’ll come out with a principle that relates to the people, places, activities or philosophy of your retirement. That principle is the progress in the equation above. It’s the newfound wisdom that gets you a bit closer to your ideal life and retirement. The more you experiment, learn and iterate, the better your odds of having a happy, meaningful retirement. In some ways, you might even learn to enjoy the pain as an indication of progress. Again, Ray Dalio:
“Encountering pains and figuring out the lessons they were trying to give me became sort of a game to me. The more I played it, the better I got at it, the less painful those situations became, and the more rewarding the process of reflecting, developing principles, and then getting rewards for using those principles became. I learned to love my struggles, which I suppose is a healthy perspective to have…”
Memento Mori. In English it means: “Remember that you will die.”
This has been a tough couple of weeks for me. My mom died very unexpectedly after a brief illness. On January 29th, I met her for dinner to celebrate her 67th birthday. We had a wonderful time. On February 5th, she was hospitalized with what turned out to be a terrible infection. On February 9th, she was gone.
One week, we were talking, laughing and telling stories over a nice meal. The next week, in the small hours of the morning, I sat by her hospital bed, held her hand and told her I loved her as I watched her last heartbeat move weakly across the monitor. I don’t have the words to convey how jarringly painful that was.
Still, I’m grateful. Grateful to have had her as my mom. Grateful to have always had a wonderful relationship with her. Grateful to have made some new memories just a week before she died. And yes, grateful for the reminder of mortality. The Memento Mori. One of my favorite verses is Psalm 39:4.
“Show me, Lord, my life’s end and the number of my days;
let me know how fleeting my life is.”
I like that verse because I often need the reminder. I know I’m going to die, but I don’t always live like I believe it. Maybe some of you are guilty of that too. If so, consider this your reminder.
If you died today, would you go in peace without a single regret? Or would you, like most of us, feel bad about the things left undone or unsaid? The relationship that needs mending? The affairs that need to be put in order? Sit with those thoughts this week. Write them down. And then act. You know what you should do. So do I. The challenge is to make sure that knowing transitions into doing and believing becomes behaving. You and I have been given an amazing gift: Today. Use it wisely.