Is the concept of retirement outdated? You know — the idea of working hard for 40+ years to retire to a life filled with tee time appointments and relaxation. While this idea may seem dream-worthy to some, to others this notion of what retirement should look like doesn’t align with how they want to spend their golden years. In today’s issue, we explore the idea of what retirement means to you and steps you can take to create the type of life you want to live during retirement.
The challenge of retirement. The current notion of retirement is to spend your early and mid-career years working extremely hard so that you can relax in your later years. Doing so means the majority of your working years are spent saving aggressively to maximize spendable income during retirement. This notion works well for some. For others, current retirement ideals equate to being chained to work seeking a light at the end of the retirement tunnel. Another concern is that a significant portion of the workforce aligns their self-identity with their work roles. For retirees, once that work title is no longer there, it can be a challenge to distinguish one’s place in society. In fact, the New York Times challenged the current idea of retirement in a recent article; finding traditional retirement paths can lead to increases in clinical depression and physical illness by 40-60% respectively.
Work towards the work you want to do. Instead of giving up work completely during retirement, perhaps this time should be spent pursuing work you find meaningful and impactful. That might mean spending time working on passion projects or volunteering with nonprofit organizations or pursuing entrepreneurial pursuits you’ve wanted to pursue for a while now. An article from the Wall Street Journal explores how retirees can find their purpose after leaving the workforce saying, “It isn’t enough to just lounge in your hammock reading books when you retire. You’ve got to throw in some activities that make you feel good about yourself—the way your job did. The trick is to figure out what those are when your employer isn’t telling you what to do anymore.”
Alternately, instead of staying in a job you hate and simply enduring until retirement rescues you, the same New York Times article referenced above suggests pursuing work you find enjoyable — even if that means taking a pay cut. The beauty of creating sound financial planning from a young age means you have the freedom to take risks during your later career and retirement. While taking a lower paying job might mean you aren’t able to contribute as much to your retirement plans as before, perhaps you’ll stay longer in that position and delay pulling from retirement accounts. As the article says, “Don’t underestimate the effect of another decade of compound interest at that point in your life. It’s a huge deal.”
What does ‘retirement’ look like for you? The revolutionary idea here is that retirement can be what you want it to be. Like everything else in life, there is not one correct path for retirees to take; whether you want to spend retirement never working again or whether you want to spend it doing work you find meaningful. From a financial standpoint, the goal of retirement is simple: to ensure you have enough money to maintain the lifestyle you want to live during retirement. At TrueNorth Wealth our investment team ensures you’re taking the necessary steps to accomplish this goal. Our financial plans revolve around effectively managing investments in retirement saving vehicles like 401(k)s and IRA plans, efficient estate management, tools to lower taxable income, and more. Whether your goal in retirement is to spend your days doing meaningful work for causes you care about or spending your golden years on the golf course, we’re here to help you achieve your retirement dreams.
TrueNorth Wealth is a financial and wealth management firm specializing in personalized financial guidance to individuals and businesses. For a free financial consultation, contact TrueNorth Wealth.