Working Wealthy – Can You Define Retirement?
My daughter turns eight this year, and she has been bitten by the reading bug. Don’t get me wrong; it’s a great thing—hopefully, a habit that lasts a lifetime.
However, she has come to think of me as the household dictionary.
And as a former English major, I was initially excited for the opportunity to help her. But now, I’m finding that I use even bigger words to define big words. It must be eternally frustrating for her.
It made me think of our clients though and their retirement planning. What does retirement even mean? It has myriad different definitions for all walks of life. Oxford simplifies it, “the action or fact of leaving one’s job and ceasing to work.”
It’s just that simple.
In my experience working with people contemplating the biggest move in their adult lives—going from accumulation to consumption—defining what retirement means to you is likely a personal and nebulous thing.
Here are the three most common definitions I have come across:
1. Financial Autonomy – Some time ago, I worked with a client that suggested to me the idea that one’s income is the retentive aspect of what might keep a person at a firm or working a certain way. While not an earth-shattering concept, it was beautiful in its simplicity.
Once that retentive nature of the income goes away—in other words, you’ve saved enough—one might argue that your job becomes less vital.
This definition ignores the emotional or behavioral enjoyment one might achieve through work. But it certainly distills what could keep someone working—having enough to say that one’s paycheck or bonus or stock options might no longer carry the same weight.
2. Freedom – I just want to do what I want to do when I want to do it. Sound familiar?
Often, I hear from clients that their biggest joy in retirement is simply being on their time. Perhaps it’s that attainment of flexibility that truly feels like retirement for someone.
They may still be working, but it’s in a consulting role or through boards and volunteering. Whatever the case, choosing to do what is most important to you is a nice place to be.
3. A New Chapter – Few people start out knowing what they want to be as a professional, become exactly that professional, and then retire. The statistics on how many jobs people will hold today compared to three generations ago are like night and day.
Maybe retirement for you means the ability to start a new career that is only focused on what you want to do. Maybe it involves taking a risk on yourself in starting a small business or working in a totally different field.
However, your new chapter might look, we think it’s important to focus on your plan and understand how to make that happen for you. At BDF, this is our single most important job for clients.
Whatever your definition of retirement is, I hope it’s something that allows you the ability to live your life just as you choose.
In his role as Wealth Manager, Nick is primarily responsible for introducing prospective clients to BDF. Nick has served as the head of BDF’s Financial Planning Committee and has participated on the Business Owner Team. He is passionate about the goals-based planning that BDF does for its clients and enjoys focusing on the behavioral aspects of decision making. Nick is a CFP® professional.