Most people dream of a comfortable retirement. But not every one’s idea of retirement is sitting in a recliner watching “The Price is Right” every morning before your mid-day nap. (Just kidding!)
You may not even actually stop working, if you are passionate about what you do. But it is likely that you want to reach that “financial cross-over point” where you can either:
1.) Live off investment or retirement income and stop working completely
2.) No longer need to work as hard, or as many hours, or keep doing something you don’t really like just for the money-i.e., become free to pursue other interests, whether they make you enough money to live off or not.
If you never plan to fully retire, the size of your nest egg, and therefore how much you need to save up during the years leading up to your retirement, may need to be less than if you plan to live off of your investments completely.
What this really means though, is that you may be able to reach your definition of retirement, or take care of your retirement needs, faster than you originally thought-i.e., early retirement-according to your own definition.
Currently, I really enjoy what I do for a living at my day job. I also enjoy some of my other hobbies and interests that occasionally earn me a little money as well. I have come to the realization that I could see myself doing what I do for a living in some fashion- either starting my own business or company, freelancing, or maybe even just working part time- for quite a while, likely into my 70’s or beyond.
It’s not that I want to stop doing what I am doing now for a living, but I certainly wouldn’t mind a little more freedom. Freedom to work when I want, and how much I want. As of right now, that is what retirement, or early retirement would probably be for me. I would like to travel some, spend time with family and friends, spend some time helping others, and work some.
A couple of years ago, I probably would have said I would want to stop working completely when I retire. Not because I hated my job, but because I thought that was what retirement meant. Nowadays, I don’t feel that way. But who knows? Five or ten years from now, a traditional retirement may appeal to me, and I will have to change course somewhat- either work a little longer, or try to save more to be able to live off my retirement savings.
In preparing for battle I have always found that plans are useless, but planning is indispensable. -Dwight D. Eisenhower.
I think this applies to reaching your ideal retirement goal as well. It is the planning part that is important, not the actual plans. Your plans may change, but if you don’t engage in “planning” for them, whatever they end up being, it will be that much harder to reach them. In fact, you may not even realize it when you get there.
Have you thought about your retirement needs, and what retirement will mean for you lately? Is it different than a few years ago?
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I think Gen X and Y will gradually change the definition of retirement in the coming decades. Working towards more fulfilling careers, taking occasional breaks in one’s career and the pursuit of project-based career trajectories may become the norm yet.
I definitely want more time to do the things I love. Other than that, I want the freedom to decide what kind of work I want to pursue at any given time. I’ve thought about simply working less, or opening a small shop, working on some projects to distribute for free, volunteering, switching careers, doing freelance work, the list goes on! I simply want the freedom to live whatever life is best to me at the time.
@Dana- I think you are right- I would not be surprised to see that happen a lot more often in the near future.
@Slinky- Sounds like you have the right idea! I’d love to get to a place where I can do similar things myself.
Very good points, all – Mitch Anthony covers this in his book “The New Retirementality” – how folks are changing the face of retirement (yes, even us stodgy old ‘boomers are doing it!).
One of the points he makes is that, when many of us reach the traditional retirement age of 62, we have possibly a third of our lives yet ahead of us… and that’s a lot of Jeopardy to watch and golf to play! Just the amount of life remaining and the continuing improvements in health of our aging society requires that avocations are undertaken in “retirement” just to keep us from getting bored…
jb
@Jim- Sounds like a good book-thanks for the heads up. I agree. At 62, you (hopefully) have a good deal of time left, and shouldn’t necessarily think it is time to “hang it up”!