(Photo above | Pixabay)
The rules of retirement have changed! We all face the challenge of longevity as we prepare for the exciting yet daunting years of retirement. I call it the Age Wave. Americans are retiring earlier and living longer, and the gap is growing. During the last century, our life expectancy has almost doubled. Not only are people living longer, but the proportion of our older population in this country is growing dramatically. Think about this — The over-80 population is growing five times faster than the overall population.¹ For a couple aged 65, there’s a 50 percent chance one will live to 91, and a 25 percent chance one will live to 96.² By 2030, the demographics of 32 states will resemble those of Florida today.
In the past when people retired they often cut themselves off from work and thereby much of society. Rocking aimlessly on the porch, they assumed “role-less roles,” in the words of a leading gerontologist. As we currently live extended, healthier lives, and as the period between the end of work and the end of life continues to grow steadily longer, the question of the purpose of this period in life takes on greater importance.
When I first meet with a client at my office, their priority is often to reach retirement or live the life they have always imagined during these years. When I begin to dig a little deeper on what retirement means to them there usually is not a clear vision in place of how they would like this part of their life to look. Many of the people I meet never actually retire! At first, this may not sound like a financial roadmap for you but let me explain. The word Retirement comes from the old French word retirer, meaning “to end” or “to be put out of use.”
When people retire today, especially here in Central Oregon, their focus is not typically on the end. In fact, for many they are just beginning as statistics show that many people will spend more than 1/3 of their lives in retirement. Retirement no longer only means the end of work. It should be viewed as the beginning of a new, even a better life.
In 1950, half the men over 65 remained in the workforce. Today this number has dwindled. It was not that long ago that the average person in our country would retire around the age of 70, receive their gold watch for 30 plus years of service at their company and just a few short years later they would no longer be with us. In 1900 the average American lived to the not-so-ripe age of 47. Today that number is 79, and rising. What this means is that many retirees get bored. How much golf can one play? Over time people begin to miss some of the action and feeling of achievement their working years offered.
I see more and more individuals are “retiring” for a period to catch their breath before making the transition to a new chapter in life. Some decide to open up the small business that they have always dreamed of. I know of a couple who started a coffee shop as it had always been a dream to be of service to their community and make new friends as the public would come to them each day for a visit. They created their shop not because they were dependent on any income from the business but because this would give them purpose and pleasure. Are they actually retired? Are their lives ending? They certainly don’t think so. They are financially independent. When people are independent of the paycheck and starting their business for the sole purpose of joy and fulfillment, I believe their chances for success increase exponentially.
Over the years, I have replaced the word retirement in my practice with the term financial independence. What does financial independence mean for you? Have you planned for it? This new generation of aging boomers seems poised to swap that old dream of the freedom from work for a new one built around the freedom to work.
A dear friend of mine named Dan is in his mid-70’s and still runs his thriving business. He was recently asked by a colleague: “Dan, when are you going to retire?” his quick response was: “I’ve been retired for many years now.” “What do you mean?”, the man stated in a confused tone. Dan stated, “I retired years ago, from all of the things I no longer want to be doing.” This is probably the best answer I have heard!
Graying now means playing for many of today’s retirees. Neither young nor old, they are finished with midlife, yet they can look forward to the likelihood of decades of vitality before becoming truly old. What might they rightly aspire to in the next phase? How will you define success in your years of financial independence?
¹ U.S. Census Bureau.
² “How to Manage Risk in Retirement,” Morningstar.com
David Rosell is President of Rosell Wealth Management in Bend. www.RosellWealthManagement.com. He is the author of Failure is Not an Option- Creating Certainty in the Uncertainty of Retirement and his latest book Keep Climbing — A Millennial’s Guide to Financial Planning. Learn more about his book at www.DavidRosell.com. Ask for David’s book at Newport Market, Cafe Sintra, Bluebird Coffee Shop, Dudley’s Bookshop, Roundabout Books and Sunriver Resort. E-Books can be purchased online at or Amazon.com or Barnes & Noble.
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