Is It Time to Retire the Concept of Retirement?

This is retirement. Is it What you really want?

This is retirement. Is it What you really want? (Photo credit: Wikipedia)

Earlier this week, I read yet another post extolling the virtues of early retirement. The guest post at Canadian Budget Binder at least had a section to try to answer my contrarian argument: I don’t want to retire. Simply put, I’d rather stay busy and I’d rather have someone tell me how to stay busy. James who wrote the post had to say this on the matter:

You don’t have to stop working just because you can retire! You could do all manner of things that are made impossible by being chained to a desk all day.

This lead to some discussion in the comments regarding the nature of the word retirement. It also got me thinking, is the concept of retirement outdated in today’s world?

Just what is retirement? It seems to mean different things to different people. Dictionary.com defines retirement as removal or withdrawal from service, office, or business. This is pretty much the definition I would use. I don’t consider a person retired if they continue working past their retirement.

Working Retirement

Joe at Retire By 40 writes a great blog but his cash flow statements make it obvious that influxes of cash from freelancing are required to stay afloat. To me, Joe isn’t retired. He simply quit his day job in favor of part-time self-employment.

That seems to be a very common retirement, especially for the early retirement crowd. But I can’t bring myself to call a “working retirement” an actual retirement. You are still depending on a paycheck. The paycheck just comes from a difference source. It doesn’t matter if most of your income is coming from a working spouse or investment income, if hustling now is required to pay the bills, you aren’t truly retired.

Working After Retirement to Stay Busy

Another common argument is that being retired doesn’t mean that you have to be bored. You can work on projects that you didn’t have time while you were employed, get a part-time job, volunteer, or spend more time with family.

I’ll lump projects and family in the same paragraph. Because they have the same problem: neither will take up enough of your time.

One of my grandfathers retired and now comes to visit for every minor event. He would come down to watch my brother and sister in the marching band at football games, and then stay the rest of the day. We came down to watch regular league bowling matches. I understand why, he’s at an age when a lot of his friends are dying and we were pretty much the only family he had left in the area.

My other grandfather took to the projects route. He made cutout reindeer for almost everyone in the family, remodeled his entire house, and cleaned out the garage more times than I can count. And throughout this, he still managed to find the time to “retire” 4 more times. My grandmother? She wound up  filling her post-retirement days by becoming a Jehovah’s Witness.

Volunteering is a worthy goal. If you can find something that you want to do for free for 20, 30, 40 hours per week for years on end, go for it. To me, that sounds suspiciously like working without the paycheck.

How about working with a paycheck? If you don’t actually need they paycheck, then you can call yourself retired right? Not in my mind. You haven’t withdrawn from the world of business. You’ve simply taken a pay cut and possibly changed careers.

As I mentioned above. My grandfather did this. He retired from a career as a tank mechanic in the National Guard. He quickly found himself bored and ran NJ’s artificial reef program until the program ended. He pumped gas at a local gas station for a couple of years until that gas station closed. And for years he was a gopher for a nearby garage until his doctor forced him to retire completely. Even then, we would frequently find him disobeying doctor’s orders and up on the roof cleaning gutters.

So if you can’t work and be retired and don’t want to retire and sit around, what is left? Only option left is not retiring. But a lot of people don’t like the idea of not retiring. It seems that the idea of retiring has been ingrained in us from a young age. People rebel at the idea of actually having to work their entire life, even if that is exactly what they plan on doing, like my grandfather.

I think that what people want isn’t retirement. They want financial independence instead.

Retirement vs Financial Independence

Financial Independence is different from retirement. Retirement, true retirement requires financial independence, but financial independence doesn’t require retirement.

If retirement is not working, financial independence is not having to work. Reaching financial independence is a laudable goal. In the grand scheme of things, it is probably better to be financially independent sooner than later. But if we are to continue to confuse the two concepts, one could say that leaving a sizable inheritance to your children means that they could retire before ever actually entering the workforce!

My favorite thing about the idea of financial independence is that there is no part of it that requires you to consider quitting your job. You can work until you die, if you want, at the job you made a career of. Or you can switch out to a “more fulfilling” but lower paying job. Strike out on your own as a full-time blogger or skydiving instructor. Or you could just sleep till noon.

Financial independence is about options. Retirement is about slowing down. That’s why I believe we should retire the silly notion of retirement as a goal for everyone. Let’s stop trying to shoehorn disparate notions of the nature of work into the concept of retirement. Let’s proudly admit that we have no intention of ever quitting. And let’s start promoting early financial independence instead of early retirement.

Do you actually want to retire? Or do you just want to reach financial independence?

 

 

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35 thoughts on “Is It Time to Retire the Concept of Retirement?

  1. Very interesting take Edward. I would have to agree to a large extent. Sure, when we’re older there will probably be a time that we’ll want to slow down and have the “traditional” retirement. That said, I really do want to stay busy even if I do give up my full time gig. I want to be able to travel, volunteer, do things we were not ale to do earlier in life. That all requires the financial independence you bring up and one we’re striving for.
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    • The sole part of 4HWW that I agree with is the idea of taking sabbaticals instead of retirement. Then you can do all of those things you would want to do in retirement and do them when you are still young enough to enjoy them.

  2. I’ve thought about this a ton and have talked to a lot of my clients about this exact topic. I really have no interest in retiring…financial independence simply gives me the freedom to start doing what I WANT to be doing. While I love my job, I’d much rather have the flexibility to work when I want (and not require a paycheck to do so). It’ll allow me to serve more on missions, volunteer at local places, and simply give my time instead of requiring compensation in exchange.

    • I’m glad to hear you say that you love your job. I think a large part of the early retirement craze comes from people getting disenfranchised with the notion of work.

  3. Ok I retired from the carpenter union and the National Guard and another job I had and now I have four part time jobs….so I went from three full time jobs to four part time jobs….retired yea I am that, I think….someone once said, retirement is leaving the rat race but with less cheese…..

  4. I agree with your sentiment that financial independence should be the goal. And it is interesting how the concept of early retirement comes up in so many articles. I’ve been trying to figure out why everyone is in such a rush to leave the workforce, considering our nation’s economic state of affairs and the rising costs of goods and services. Is it just because, as you said, “…people rebel at the idea of actually having to work their entire life?” It almost feels like as a culture, we have been completely turned off by the concept of hard work – like it is something evil to avoid.

  5. I have no interest in retiring either; I am still going to be financially independent in five years time max! I believe that we have to distinguish between ‘employment’ (and the linked retirement) and work (and having choice). I want to work but also to control the conditions of that. Btw, I have a guest post coming up soon on these matters (and the 1960s music and other 60s stuff :) ).
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  6. I think the traditional view of retirement as doing nothing comes from the fact that retirement is somewhat synonymous with being too old to continue working for the most part. I think you hear so much about the “goal” of retirement because most people save so little they’ll never be able to stop working, even at an old age!

    Like you said, financial independence should be the goal. I don’t think anyone wants to “retire” so much as spend the time doing the things they REALLY want to be doing.

    • At the end of the day, I’m not sure even that is the case for everyone. I look at people like my grandfather, or some of my co-workers. They just can’t sit still. Their overarching goal in life is to stay busy, no matter the task. I don’t think my grandfather particularly enjoyed pumping gas or running car parts. But they gave structure to a life that spent 40 years in the military.

  7. Good points. Have you read my post “what’s it like to be financially independent?” Yet? It’s a perspective I share that differentiates from retirement. I have a separate post on what’s it like to be retired as well and the differences.

    FI is what it’s all about. Having the passive income come in and not having to do anything of you don’t want to!

    Sam

    • I had actually intended to use you as an example in this post, but I was getting tired and never thought of a good place to insert you. The way I see it, you are exactly what I’m talking about. Even if you use “retired” as shorthand for your situation, you don’t seem to be retired by a long shot. I remember you mentioning once that your plan was to not dip into your stockpile of savings by making your online income meet your expenses. That’s not retired by a long shot!

  8. Great post! And I agree. While I get stuck in the mindset of early retirement…I have no plans to sit on a beach for my (many) remaining years. Financial independence is a more empowering term and one I wish I would have heard about much earlier in life. Can’t wait to have the flexibility to choose to work, or volunteer or travel. OR, do nothing.

    • Just as the narrative seems to be that everybody retires after 40 years (or even fewer) of work, as a nation, we’ve also come to believe that everybody should be working for somebody else that entire time.

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  10. A really excellent post. I do think a “re-think” about retirement is in order. My wife’s uncle came back out of retirement (after 8 years) at the request of his former employer.

    Of course, there is a downside: older folks staying in the work force reduces available jobs for younger people.
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  11. Interesting post, and thought-provoking.

    To me, the most important thing is financial freedom. As in, freedom to work or not work depending on my interests. If I don’t work because I need to, I still might work because I want to. But the work might be very different, and might not even be work in the traditional sense. For example, WAY down the line (like 25/30 years?) it could mean helping with grandkids a few days a week. Who knows?

    The big thing to me is the notion of our bodies declining over time, and not being able to work if I needed to. Thus, I feel like it’s important to plan on saving enough to “retire” in that sense, but also to be able to retire in the way I mentioned above.
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    • Bodily decline is the only reason I ever see myself retiring. When I’m calculating savings needed for retirement, I’m basing it off my needs for such a time. As such, I don’t need a huge stockpile of cash for retirement. Just enough to pay for medical bills and living expenses for a few years.

      Once I get my debt paid off, I will start saving money towards financial independence, but that won’t go into retirement accounts where it is stuck until I’m no longer fit to enjoy it.

  12. I am aiming at financial independence too. I retired from my day job and still manage my other sources of income (real estate, investments) in a pretty active way. I still make additional writing and translating income, but it is voluntary, as I enjoy it and it preserves my nest egg in the meanwhile. Being retired and doing nothing from 30 until I die is not something I would enjoy, although if I have kids I hope to be able to cut down on the active management of assets. It is all about having choices and freedom.
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  13. I think you are right that financial independence and retirement get interchanged but are not the same in literal definitions. My inlaws are retired, meaning they don’t work anymore, but they are far from financial independence. My dad could retire and have plenty to live on, but he’d either go nuts or drive everyone nuts in 2 days, so he will probably work until he drops. I guess you could say he is financially independent, but not retired at all. Whatever you want to call it, choosing to work rather than having to work is what I’m going for. BTW, I don’t think Financial Independence by 40 sounds nearly as catchy as Retire by 40.
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  15. Looking at your post from a slightly differetn biew, it raises another question about what “work” is. It almost seems conditioned in us that work has to be hard, boring and unfulfilling, probably because for a lot of us it still is, so yes, I would like to retire from “work” as soon as possible, wouldn’t anyone?
    If you succeed in turning your hobby or something else you enjoy into a means of generating income, then people are more reluctant to call it “work”.

    • If we believe that work is unfulfilling, it is because we have become conditioned to believe that the nature of work is thus. My father is a long-haul truck driver. Personally, I can’t imagine anything more boring than sitting behind the wheel 70 hours per week. But his wages put a roof over our heads and food on our table; what could be more fulfilling than providing for your family?

      Mike Rowe has spoken very elequently on what he refers to as the “war on work” In 2008, he did a TED talk on work and happiness. (http://www.ted.com/talks/mike_rowe_celebrates_dirty_jobs.html) He’s found that, as a group, the happiest workers are the ones that have those “dirty” jobs that many would think of as “hard, boring, and unfulfilling.”

  16. I love the point of view! I think if we proceed through life with your viewpoint, we can assure ourselves that we will love out work and choose it wisely. Ask yourself: “If there was no such thing as retirement, would we be doing the same work?”. Hmmmm….

    Great blog man!
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