Do you really want to retire? I don’t.

Sonnie Bailey

22 February 2018

I was recently quoted in a article about a “plague of financial insecurity, and those unwilling to be victims to it“.

The article referred to the FIRE (“financial independence, retire early”) phenomenon. I was mentioned because I have some involvement in some of the online forums relating to this community.

Although I’m involved in the Kiwi FIRE community, I’m a bit of an odd duck. FI (“financial independence”) may appeal to me, but I don’t want to RE (“retire early”).

In fact, I’m quoted in the article as joking that “I want to die with my boots on”.

And I do. I want to work for as long as I can.

But my plan is to do it because I want to, not because I have to.

I want to be financially independent, and be in a position where I don’t have to work. But that doesn’t mean I want to retire early.

And if you think about it, neither may you.

Work isn’t just about money

For most people, work isn’t just about money. It’s where you spend a huge amount of your time. It can provide you with rewarding social interaction. It can give you a sense of identity and contribution.

Work can also be – wait for it! – fun.

(To be sure, not every aspect of working is fun. And it might be unreasonable to expect your first serious roles to be “fun”. But if you become “so good they can’t ignore you”, as Cal Newport describes, you can develop quite a bit of leverage to focus on the things you most enjoy.

Also, many people think that success follows enjoyment, when in fact it’s often the other way around: enjoyment follows success.)

On this note: If you’re planning for retirement and all you’re doing is focusing on money, you’re doing it wrong! I encourage people to think less about “retirement planning” and think more about “whole-of-life planning”.

If you want to keep working, you need to be able to keep working

A phrase I keep repeating to clients and readers of this blog is that “retirement is often a euphemism for displacement from the workforce”.

Career risk is a major financial risk for many people, and it’s one that is often overlooked.

If you can get into a position where you can always generate a reasonable income, you are in good financial shape. You can be confident that you can support your lifestyle, no matter what happens to your assets.

(Illness and injury aside, of course – which is what insurance is for.)

When it comes to being able to work, there are many factors that come into play. For example, it’s easier to do so if the work you do isn’t physically demanding. It often also requires a combination of valuable skills, knowledge, as well as social and reputational capital. For everyone this combination of factors is different.

In my case, it’s one of the reasons I’m focusing on building up my own business, despite the immediate opportunity costs of a much higher income if I worked in an established business. My reasoning is that if I want to work on my own terms, it’s much better to have dozens or hundreds of clients, and the ability to attract new clients, rather than have to rely on a single client – an employer. It’s also why I’m doubling down on providing valuable content such as the resources on this site. If I can build enough credibility and reputational capital, then I’ll be more able to die with my boots on.

Getting to the position I’m talking about doesn’t happen overnight. Even if it’s a multi-decade project, for many people it’s a project worth undertaking.

It takes the pressure off

If you’re confident in your ability to generate an income during the course of your “retirement”, this takes the pressure off in terms of what you need to accumulate by the time you retire.

Generating an extra $500 per week is about $26,000 per year. If you want a lump sum generating 3% to provide you with this level of income, you need to save $867,000. That’s quite a bit of money. (Although technically this overstates the lump sum you’d need to sustain spending of $26,000 in retirement, because spending some of your capital over time may be appropriate.)

This shouldn’t dissuade you from saving for retirement, on the basis that you can still work. As I’ve mentioned, the ability to work as you get older is not a given. And your priorities and interest in working might change.

I’ve also spoken to enough people to know that working because you want to is a lot more satisfying than working because you have to.

Personally, this realisation has made me feel a lot more comfortable about planning for retirement. It has also given me more confidence about the decision to forego income in the present (and save less, in tangible dollar amounts), to create an additional level and form of financial security.

What works for you? How does work fit into your retirement plan?

Whether you want to retire, and when, and on what terms, is a personal decision.

There are uncertainties involved, of course. But the more you acknowledge and address these uncertainties, the more effectively you can manage them.

Instead of just thinking about retirement in terms of money, and how much you want or need to save, think about what you actually want to do when you’re retired. Might work of some description fit into this?

If money wasn’t an issue, how might work fit into your whole-of-life financial and lifestyle plan?

If you give it some thought, you might be like me. You might want to die with your boots on.

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