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 It also got me thinking, is the concept of retirement outdated in today’s world?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.
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?